Tuesday, December 1, 2009

BOJ Makes Unscheduled Decision on Quantitative Easing Steps

It's unclear why the Bank of Japan moved now, but in a surprise move, just a day before BOJ monetary policy makers are scheduled to meet, the bank has announced that it is taking additional quantitative easing steps.

The central bank unanimously voted to keep its overnight call-rate target at 0.1% but also set up a new 10 trillion yen ($120 billion) lending facility, which will accept as collateral Japanese government bonds, corporate bonds, commercial paper, and deeds on loans.

"While Japan's economy is picking up, there is not yet sufficient momentum to support self-sustaining recovery in business, fixed investment and private consumption," the BoJ said in its statement, adding that the recovery will likely "remain moderate" through late 2010.

Bank of Japan Gov. Masaaki Shirakawa said at a news conference Tuesday after the decision that the new lending facility is aimed at making loans available at "virtually zero interest rates," and could be called "quantitative easing in a broad sense," according to Dow Jones Newswires.


  1. Wenzel,

    That USD-JPY exchange rate was getting awfully squirrelly for companies trading between the US and Japan. For instance, can you imagine was Y85-$1 does to a company like Toyota?

  2. Wow. This is sad. The FED believes the US will suffer depressed employment figures for five years and referring to the BoJ this article says: "The bank pledged to cooperate with the government to do all it can to pull Japan out of deflation, which the bank has said it expects to last for three fiscal years."

    This guys didn't prevent a depression, they have institutionalized it!