Bank of Japan's 'monetary easing' decision lowers yen to 20-year-low

By Gokhan Ergocun

ISTANBUL (AA) – The Bank of Japan decided to keep the interest rate at minus 0.1%, according to a press release on Thursday.

During the monetary policy meeting of the bank, starting on Wednesday, the bank has decided to continue purchasing "a necessary amount of Japanese government bonds without setting an upper limit."

It added: "The bank will purchase exchange-traded funds and Japan real estate investment trusts as necessary with upper limits of about 12 trillion yen ($92 billion) and about 180 billion yen ($1.3 billion), respectively, on annual paces of increase in their amounts outstanding."

The bank said it will continue with "Quantitative and Qualitative Monetary Easing with Yield Curve Control" for achieving the price stability target of 2%.

After the decision, the Japanese yen hit the 20-year-low against the US dollar at 0.768, as of GMT0720.

In another press release on Thursday, the bank said the country's economy is likely to recover thanks to the government's economic measures.

It also said that commodity prices, increasing due to the Russia-Ukraine war, are expected to have pressure on the Japanese economy.

It added: "The projected growth rates for fiscal 2021 and 2022 are lower due to the effects of such factors as a resurgence of COVID-19, the rise in commodity prices, and a slowdown in overseas economies.

"However, the projected growth rate for fiscal 2023 is higher, partly owing to a rebound from the lower projection in the previous year."