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Bank of Japan board votes unanimously to keep monetary base target

Published 02/17/2014, 11:01 PM
Updated 02/17/2014, 11:34 PM

Investing.com - The Bank of Japan board on Tuesday decided at its monthly meeting by a unanimous vote to leave its policy target unchanged, maintaining the pace of large-scale financial asset purchases.

The board also decided unanimously to double the scale of its program to make low-interest loans to financial institutions leading to or investing in growth-oriented sectors and projects. The maximum amount of the loans will be raised to JPY7 trillion from JPY3.5 trillion.

The board also voted to expand another facility aimed at stimulating commercial bank lending that allows institutions to borrow funds from the BOJ up to an amount that is twice as much as the net increase in their lending.

Under the two programs, lenders will be able to borrow funds from the BOJ at a fixed rate of 0.1% per annum for four years, instead of the existing period of one to three years.

"The bank expects that these enhancements will further promote financial institutions' actions as well as simulate firms' and households' demand for credit, with a view to encouraging banks' lending and strengthening the foundation for economic growth," the BOJ said.

As for the monetary policy target, the BOJ will continue conducting money market operations so that the monetary base will increase at an annual pace of about Y60 trillion to Y70 trillion. The annual pace of the BOJ's purchases of Japanese government bond will remain at about JPY50 trillion.

BOJ Governor Haruhiko Kuroda will hold a news conference from 1530 local time (0630 GMT).

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