couple Leika Kihara
TOKYO, Sept 12 (Archyde.com) – The Bank of Japan (BoJ) should end emergency programs in the face of the coronavirus pandemic and discuss adjustments to its policy, according to three people familiar with the matter .
A final decision will be made at the BoJ meeting, to be held on September 21-22, when the Japanese central bank’s board reviews the available data to ensure that the high number of cases of Coronavirus contamination does not lead to a sharp drop in economic activity, the sources said.
Japan’s economy grew by 2.2% annualized in the April-June period, representing a slower-than-expected rebound from the coronavirus pandemic, the resurgence of the epidemic, supply constraints and the rising raw material costs weigh on consumption and production.
The end of emergency programs would reflect the easing of financing constraints for small businesses in the service sector, which have been hardest hit by the pandemic, the lifting of restrictions related to COVID-19, including the easing of border controls, helping to boost consumption.
The BoJ is expected to maintain the short-term rate target at -0.1% and its commitment to contain the yield on 10-year government bonds around zero.
The BoJ’s decisions, which aim to support Japan’s fragile economic recovery, go against the strategies adopted by the other major central banks in the world, which are tightening their monetary policies in order to fight against inflation.
(With contributions from Takahiko Wada; French version Camille Raynaud)