At a unscheduled monetary policy meeting today, BoJ announced to introduce a new Fund-Provisioning Measure to support financing of small and medium-sized businesses. With the new facility, zero-interest loans are offered to financial institutions that boost lending to SMEs by tapping government guarantee programs. It also offers to pay 0.1% interest to lenders that boost such loans.
At the same meeting, BoJ also kept monetary policy unchanged. Under the yield curve control framework, short-term policy rate is held at -0.1%. BoJ will also purchase JGBs, without upper limit” to keep 10-year yield at around 0%. Kataoka Goushi dissented the decision and pushed for lowering short- and long-term interest rates further, in response to a possible increase in downward pressure on prices.
