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Bank of Japan boosts its stimulus package

David Hobart

The Japanese central bank announced a boost to its stimulus packages on Monday – a move which led to a rise in the value of the yen.

The Bank of Japan said on Monday that it would increase the amount of stimulus it offered to firms in its private sector, including by removing the previous limits on how many government bonds could be bought up.

It also revealed that it was raising the amount of corporate debt.

The move had an impact on the value of the yen, with the currency rising in its pair against the US dollar to 107.28.

It also reached a record high point in its pair against the single European currency too.

In this pair, it was spotted at 116.36 at one stage.

Japan has had a difficult few weeks in relation to the coronavirus recently.

The capital city, Tokyo, was placed into a state of emergency as the crisis took hold.

There has also been a significant economic contraction in the country since the pandemic began, and lockdown measures are in place – as they are in many major economies.

This week looks set to be a major one when it comes to global central banking.

Later Monday, for example, there will be a meeting of the US central bank.

The Federal Reserve will kick off a meeting lasting until Wednesday.

It is not expected that the Federal Reserve will make any significant changes to its already-stated course.

Analysts predicted that there would be little movement for the dollar, which has in recent weeks established itself as something of a new “safe haven” due to its high liquidity – which is in turn in demand due to the ongoing economic crisis caused by the pandemic.

On Thursday, there will be a meeting of the European Central Bank.

This meeting is widely expected to lead to changes.

The ECB is expected to buy up more debt, including what are known as “junk bonds”.

Aside from any economic consequences of this, there could be political ones too.

The major member states of the European Union are currently quarrelling over where the financial impetus for stimulus packages should come from.

There was a rise for the pound following media speculation in Britain that the lockdown there could be lifted in the near future.

However, the country’s exact date of leaving the lockdown is yet to be finalised.

Prime Minister Boris Johnson, who has been out of action for weeks due to contracting the coronavirus and taking time off work, is expected to return to his desk today.

The pound was up in its pair against the euro, reaching 87.20 pence at one stage.

In Australia, the dollar was up by one whole percentage point in its pair against the US dollar.

It was seen at $0.6462 at one stage.

This came against a backdrop of increased “contact tracing” in the country, which saw more than a million or so people there install an app for this purpose.

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David Hobart
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