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26 Mar 2020
BOJ’s Adachi: Coronavirus outbreak has dealt a severe blow to Japan, USD/JPY remains below 110
WITH TIMING OF CONTAINING VIRUS UNCERTAIN, BOJ MUST FIRST HELP EASE IMMEDIATE PAIN ON FIRMS BEFORE CONSIDERING STEPS TO BOOST ECONOMIC GROWTH.
BOJ WILL NEED TO TAKE FURTHER STEPS IF IT MUST PROVIDE MORE FUNDS THAN UNDER FRAMEWORK SET IN MARCH.
NO NEED TO TAKE ADDITIONAL STEPS NOW BUT WATCHING DEVELOPMENTS CAREFULLY.
I HAD BEEN PROPONENT OF POLICY FOCUSING ON AMOUNT OF MONEY BUT DON'T THINK YCC, NEGATIVE RATE POLICY ARE NECESSARILY A WRONG POLICY.
IF ECONOMY FACES CRISIS FROM VIRUS FALLOUT, BOJ SHOULD BOOST LIQUIDITY PROVISION RATHER THAN CUT RATES.
BOJ STILL HAS SCOPE TO BUY ETFS UNDER NEW CEILING SET IN MARCH.