The Day at a Glance | April 27 2020

Bank of Japan broadens monetary stimulus

In its monetary policy meeting, the Bank of Japan has committed to buying a limited amount of government bods and double its purchasing of corporate debt (20 trillion yen) to maintain interest rates low. These measures also seek to back the government`s actions, which has announced aggressive spending programs to avoid a deep contraction in the economy. Among other measures, what is being considered is an admission of household and consumer debt as collateral for funding. The Bank`s Governor, Haruhiko Kuroda, assured that the current crisis count have an impact even more negative than that seen in 2008 and that the government and the central bank should act in coordination. The BoJ also cut its growth and inflation estimates, projecting a (-) 5% contraction in the economy in 2020 and a limited increase in the consumer price index of 0.4%. Kuroda admitted that prices have lost momentum and that he does not expect to reach the 2% objective in the next two years. This week, monetary policy meetings will also be held in the European Central Bank and the US Federal Reserve.