BoJ: Will take additional easing steps without hesitation as needed

Following are the key highlights from the Bank of Japan (BoJ) monetary policy statement, as cited by Reuters.

BoJ will sharply increase JGB buying amount.

Leaves unchanged forward guidance on interest rates, says expects short-and long-term policy rates to remain at ‘present or lower’ levels.

Leaves unchanged its guidance on policy bias, says it will take additional easing steps without hesitation as needed with eye on pandemic’s impact on economy.

Will review operation of YCC.

Will aim to achieve price target by enhancing sustainability of monetary easing under this framework through these steps

Japan’s economy picking up.

Inflation expectations heightening.

Japan’s economy expected to recover as impact of pandemic, supply constraints subsides.

Must be vigilant to financial, FX market moves and their impact on Japan’s economy, prices.

BoJ to expand band around its 10-year yield target to 0.5% up and down each, from 0.25%.

Will increase to 9 trln yen from 7.3 trln yen monthly buying under new quarterly bond buying plan.

Fluctuation of bond market has deteriorated.

If such market conditions persist, it would have negative impact on financial conditions such as issuance of corporate bonds.

Steps decided today will facilitate transmission of monetary easing effect generated under YCC.

To conduct additional purchases of JGBs on Dec 22.

To make nimble responses for each maturity by increasing amount of purchases even more and conducting fixed-rate purchase operations when deemed necessary.

In fixed-rate JGB buying ops, bonds with highest yield between three on-the-run issues will be purchased at fixed rate of 0.50%.

Bank will set a fixed rate to be applied in auctions for 10-year JGBs no. 358 at 0.50%.

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