The Bank of Japan Governor Haruhiko Kuroda said that the Japanese Central Bank will attempt to aid the Japanese markets to stabilize, as they are currently being affected by the coronavirus epidemic.
“The BOJ will monitor developments carefully, and strive to stabilize markets and offer sufficient liquidity via market operations and asset purchases,” he stated.
The statement suggests that the bank will employ any possible tool that would let them flood the markets with money before considering monetary easing. The bank offered 500 billion yen via market operations and the market actors expect it to increase its daily acquisition of exchange-traded funds (better known as ETFs).
Kuroda is following the lead of its American counterpart Jerome Powell who recently stated that the Federal Reserve was willing to “act as appropriate” to aid the economy to face the effects of the virus outbreak.
“The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy,” said Powell on Friday.
Powell’s statements aids markets expectations for a rate cut this month.
In the same vein, the Bank of England also recently stated that it is willing to take all the necessary steps to protect the stability and ease the impact of the coronavirus epidemic on the British economy.
“The Bank continues to monitor developments and is assessing its potential impacts on the global and UK economies and financial systems,” said one of the Bank’s spokesmen, “The Bank is working closely with HM Treasury and the FCA (Financial Conduct Authority) – as well as our international partners – to ensure all necessary steps are taken to protect financial and monetary stability,” he added.
Those recent statements aided expectations for a coordinated central bank action to address the effects of the outbreak on the global economy.
The Bank of Japan’s governing board is meeting on March 18-19 to review its current cash rate. The Bank of England is announcing its interest rate decision on March 26 while the Federal Reserve is holding its FOMC meeting on March 17-18.
By 10:24 GMT the US dollar went down against the Japanese Yen by 0.32 percent, falling to the 107.73 level. On the other hand, the Euro went up by 0.48 percent against the Yen, hitting the 119.47 level.