Bank of Japan Announces Adjustments in its Monetary Easing Policy

The Bank of Japan (BoJ) announced today adjustment measures in its monetary policy aimed at making it more sustainable, they include greater flexibility in their purchases of state bonds and the diversification of their investments in exchange-traded funds.

At the end of their monthly meeting, the BOJ's Monetary Policy Council decided to make changes to its ambitious economic recovery strategy. the first of its kind since 2016 in a program that the Japanese central bank has applied for the last five years.

These changes will affect its extensive program of buying state bonds and listed investment funds, and controlling the yield curve to keep long-term rates around zero percent, two of the main focuses of its flexibilisation plan. 9659003] First, the BoJ will make its purchases of state bonds' in a flexible manner, taking into account market conditions and in order to achieve the target rate of interest. "long-term interest," as explained in a document

This will affect the program of purchase of government bonds worth about 80 trillion yen. (614 883 million euros) per year of the entity, with the objective that the performance of the Japanese bond to 10 years

In addition, the entity "will introduce guidance additional "on benchmark interest rates in the short and medium term, currently -0.1% for deposits of

The objective is to" keep rates extremely low over a longer period long "in order to respond to" current uncertainties affecting economic activity and prices ", and among those the increase in consumption taxes endue in Japan for next year.

All these measures aim to achieve an annual inflation of 2%, an objective that the Japanese bank has resisted, mainly because of the weakness of the market. Household spending and the global situation are forcing the BoJ to revise downwards its forecasts on the evolution of the consumer price index.

By the way, the BoJ today decided to reduce its investments in listed funds related to the Nikkei 225 index, which brings together the largest Japanese companies, and therefore stop the sustained rise in prices suffered by the actions of some of the Japanese giants in recent years.

In exchange, the Japanese central bank will increase its badet purchases in Japan. Securities markets related to the TOPIX stock index, wider than the Nikkei.