BOJ keeps monetary policy steady, sticks to cautious recovery view

The Bank of Japan kept monetary policy steady on Wednesday and maintained its view that the economy would gradually emerge from the coronavirus pandemic’s devastating blow, signalling a pause after delivering stimulus twice so far this year.

“Japan’s economy is expected to gradually improve from the latter half of this year. But the pace of recovery will be moderate as the effect of the global coronavirus pandemic will remain,” the BOJ said in a quarterly outlook report.

As widely expected, the BOJ maintained its -0.1% short-term interest rate target and a pledge to cap 10-year government bond yields around zero.

It also made no changes to its asset-buying and lending programmes for easing corporate funding strains.