- Cuts overnight call rate target
- Will keep zero rates until prices seen stabilising
- Sets overnight call rate target at 0-0.1% vs previous 0.10%
- Decision was unanimous
- To create fund to buy JGBs, other assets
- Cuts economic assessment
- Japan economy recovering moderately but improvement moves weakening
- Proposed fund aimed at buying JGBs, CPs, corporate bonds, ETFs, J-reits
- Steps aimed at pushing down longer-term market rates, narrowing risk premium
- Greater chance of economic growth undershooting BOJ July forecast
- Japan economy likely to be on moderate recovery trend
- BOJ buying under new pool of funds will be temporary step, seperate from current long-term JGB buying
- Will examine economic and price moves carefully, take appropriate policy steps
- Need to pay attention to impact of economic performance on prices
- BOJ’s cap on JGB buying will not apply to bonds to be purchased under pool of funds
- Board member Suda opposed including JGBs among type of assets to be purchased under fund pool
- Size of pool of funds for asset buying likely to be around 5 trln yen
- BOJ to mull buying 3.5 trln yen of longer-term JGBs, treasury bills within 1 year after start of pool
- JGBs, corporate bonds to be bought under pool will have maturity of 1-2 years
- Will mull buying CP, ABCP, corporate bonds of around 1 trln yen within 1 year after start of pool
USD/JPY up at 83.95 in wake of moves.
UPDATE: PLEASE NOTE POOL OF FUNDS FOR ASSET BUYING LIKELY TO BE AROUND 5 TRLN AND NOT 35 TRLN AS ERRONEOUSLY REPORTED BY WIRE SERVICE.
