BoJ Governor Haruhiko Kuroda said that his bank had no plans to end its enormous monetary stimulus programme anytime soon, speaking after the US Federal Reserve opted to taper its asset purchases overnight.
After a meeting with Prime Minister Fumio Kishida, Kuroda told reporters that his institution is in a different circumstance than Western central banks when it comes to the coronavirus pandemic.
The Federal Reserve stated, as predicted, that it will begin reducing its $120 billion monthly purchases of Treasuries and mortgage-backed securities at a rate of $15 billion per month, with the goal of ending the purchases entirely in mid-2022.
"We're keeping the monetary easing going in order to hit our 2% price stability (inflation) target. Furthermore, we are implementing a particular programme to combat the spread of coronavirus infections" Kuroda said.
The meeting was Kuroda's first routine meeting with Kishida since he assumed office last month. Following his Tuesday meeting with Japan's finance and economics ministers, in which all three reaffirmed the BOJ's commitment to achieving its 2% inflation objective, Kuroda stated that the pair discussed economic and financial market developments in and out of Japan.
New coronavirus infections in Japan are "fast reducing," according to Kuroda, but the central bank will continue to support financial institution funding through next March. "Even after coronavirus infections have been contained, we will continue to use yield curve control (YCC). The situation in the West differs from that in Japan."
Under the YCC policy, the BoJ guides short-term interest rates at -0.1% and 10-year bond yields about 0%. To attain its elusive 2% price target, the central bank buys government bonds and riskier assets while core consumer inflation hovers around zero.