The Bank of Japan cut emergency pandemic funding on Friday, but kept its ultra-loose policy and extended financial aid to small businesses, confirming expectations that it will remain among the most dovish central banks for the foreseeable future. The BoJ kept its short-term rate objective at -0.1% and its 10-year bond yield target at 0%, as expected.

The central bank also extended by six months a March 2022 deadline for its pandemic-relief loan scheme with changes to conditions, to ensure commercial banks continue channelling funding to small businesses.

The following are comments from BoJ Governor Haruhiko Kuroda:

"Each central bank conducts monetary policy that best serves its economy's needs while also contributing to price stability. As a result, it's only logical that their policy decisions differ. The BoJ's policy position will not be affected immediately by decisions made by overseas central banks.”

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"Monetary policies are being normalised by other central banks. However, even when one-off factors are excluded, consumer inflation is still about 0.5%, well below our target of 2%. The achievement of our goal will take some time. That means it's critical that we keep the huge monetary stimulus in place. This is essential for Japan's economy and prices."

"We took emergency pandemic relief measures that proved to be very useful. But that was in addition to our easy monetary policy."

"Funding support for large businesses will be reduced. However, in order to meet our 2% inflation target, we will maintain yield curve control and quantitative easing. We're ready to take additional relaxing measures without hesitation. We've also stated repeatedly that we'll keep borrowing costs low. These measures will not alter, including the forward guidance. Our monetary policy priorities will remain unchanged."