Japan’s central bank kept its benchmark rate steady and boosted its purchase of government bonds yesterday to keep ample cash in the monetary system as the country grapples with a debilitating global slowdown.
The Bank of Japan has little room left to go on standard monetary policy, such as lowering interest rates, with its benchmark interest rate already close to zero. Wrapping up a two-day meeting, the bank’s board voted unanimously to keep its key overnight call rate at 0.1 percent.
That compares with the US’ targeted range of between zero and 0.25 percent and the eurozone’s 1.5 percent.
The Bank of Japan also raised its monthly government bond purchase to ¥1.8 trillion (US$18.3 billion) from the previous ¥1.4 trillion, effective this month.
Late on Tuesday, the bank decided on an unusual move to explore a framework to provide loans to commercial banks in an effort to shore up their capital base.
That in turn is expected to encourage commercial banks to lend more freely to businesses. Fears are growing about businesses that are struggling because of tightening credit amid the deepening downturn.
“The options left for what the Bank of Japan can do are limited, and so it has decided to carry out what it can do,” said Yasuo Yamamoto, economist at Mizuho Research Institute in Tokyo.
Still, the measures are expected to achieve little direct results, although they could help boost a sense of confidence in Japan’ banks, while buying more long-term government bonds will keep interest rates down, he said.
The central bank acknowledged the capital strength of Japanese financial institutions may be hurt by the prolonged slump in the world’s second-largest economy as well as massive losses on securities.
The Tokyo stock market tumbled since the global financial crisis surfaced last year, although shares have recovered somewhat in recent sessions, partly on hopes of market-bolstering moves from the Bank of Japan.
The bank expressed deep concerns about the economy, battered by declining exports and weakening domestic demand as corporate profit drops and unemployment rises.
“Under these circumstances, economic conditions have deteriorated significantly and are likely to continue deteriorating for the time being,” it said in a statement.
But it said it expects the Japanese economy to start recovering by the latter half of the current year, which runs through next March.
The central bank already buys commercial paper, corporate bonds and stocks from financial institutions to help shore up their balance sheets.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique