Bank of Japan scale back its support for Covid funding
Bank of Japan scale back its support for Covid funding
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Tokyo:  The Bank of Japan (BOJ) said on Friday that it will scale back Covid-19 funding support for major companies while keeping its monetary policy and support for small and midsize businesses unchanged.

According to sources, the Bank of Japan resolved at a two-day policy-setting meeting to limit its purchases of commercial paper and corporate bonds issued by major companies while maintaining a programme to help small and midsize businesses through September.

In addition, the Bank of Japan will maintain its minus 0.1 percent short-term interest rate while guiding 10-year Japanese government bond yields at zero percent, despite the fact that its 2% inflation target remains a long way off. "Despite the sustained considerable impact of the new coronavirus on domestic and abroad economies," the BOJ stated in a post-meeting statement, "financial conditions in Japan have improved on the overall."

The BOJ's finance support programme consists of purchases of commercial paper and corporate bonds issued by major companies with a combined limit of 20 trillion yen (USD176 billion), as well as the provision of low-cost cash to financial institutions lending to financially distressed small businesses. The Bank of Japan will continue to buy exchange-traded funds up to a total of 12 trillion yen per year.

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