Bank of Japan to discuss interest rate changes

The Bank of Japan will meet today to discuss interest rate changes to the Japanese yen, in an effort to

The Bank of Japan in Tokyo

Photo: Kazuhiro Nogi/AFP via Getty Images

The Bank of Japan will meet today to discuss interest rate changes to the Japanese yen, in an effort to help the country’s economy recover from the recession caused by the COVID-19 pandemic.

Last month, the bank decided to leave its short term interest rate unchanged at -0.1%, instead doubling risky asset purchases to ¥12 trillion ($111 billion) to try to aid the collapsing economy. The bank also created a new one-year, zero-interest loan program for financial institutions to assist lending firms hurt by the pandemic. Trade, tourism and manufacturing have all been heavily hit as Japan’s major trading partner, China, was the initial epicentre of the pandemic.

Today’s meeting is expected to result in a reevaluation of the previous decision to maintain interest rates, as lower rates could drive more consumer spending to help boost Japanese companies. The Bank of Japan is also expected to increase company funding in other ways, including a plan to purchase more commercial bonds through September 2020.

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