The Bank of Japan expanded its monetary stimulus for the second straight month to support economic and financial activities amid covid-19.
The policy board, on Monday, unanimously decided to increase the maximum amount of additional purchases of commercial papers and corporate bonds and raised the upper limit of outstanding holdings to about JPY 20 trillion.
The board voted 8-1 to retain the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank. Also, the board maintained it yield target for 10-year Japanese government bonds at around zero percent.
The central bank downgraded its GDP forecast for the fiscal 2020 to -5 percent to -3 percent from the previous projection of +0.8 percent to +1.1 percent.
Likewise, the inflation outlook for fiscal 2020 was lowered to -0.7 percent to -0.3 percent from +1 percent to +1.1 percent.
The economy is expected to expand in the range of 2.8 percent to 3.9 percent next fiscal year and inflation to average zero to 0.7 percent.