BOJ rolls out further easing measures to counter impact from coronavirus

TOKYO, April 27 (Xinhua) -- The Bank of Japan (BOJ) on Monday expanded its easing measures for the second successive month in a bid to help fortify the economy against downside pressure from the effects of the coronavirus pandemic.

In a move aimed at ensuring enough liquidity in financial markets to help maintain stability and curb potential spikes in yields, the central bank removed its annual cap of 80 trillion yen (746 billion U.S. dollars) on the amount by which it can increase its balance of holdings of government bonds.

With no ceiling on the purchase target, the BOJ will be able to buy government bonds as it deems fit to prevent long-term interest rates surging.

Scrapping the annual ceiling comes in twine with the government passing an emergency economic package worth 117.1 trillion yen (1.09 trillion U.S. dollars), and the issuance of deficit-covering bonds to the tune of 23.36 trillion yen (218 billion U.S. dollars) to fund the package.

The central bank has remained committed to buying government bonds in a flexible manner so as to guide long-term yields at close to zero percent.

The BOJ also decided to increase its target for corporate bond and commercial paper purchases from 7.4 trillion yen (69 billion U.S. dollars) introduced in March, to 20 trillion yen (186 billion U.S. dollars) in total until the end of September.

The central bank also announced that its new policy introduced in March enabling it to provide loans against corporate debt of about 8 trillion yen (74 billion U.S. dollars) as of the end of February as collateral at the interest rate of zero percent with maturity of up to one year, would be increased to 23 trillion yen (214 billion U.S. dollars) as of the end of March.

The BOJ, however, opted not to plunge its short-term interest rates further into negative territory, past the current level of 0.1 percent, amid concerns such a move would diminish profits at commercial banks.

The bank's latest easing measures follow those instituted last month which was the first time the bank rolled out new measures in more than three and half years.