Bank of Japan (BOJ) called for an unscheduled monetary policy meeting on May 22, to discuss new measures to provide funds to financial institutions.
The move came after Haruhiko Kuroda, Governor of the Bank of Japan, gave a hint late last month that the central bank is aiming to create a scheme to aid funding for banks to support the economy impacted by the coronavirus outbreak.
“To discuss monetary control matters, based on the report by the Bank staff, in response to the instruction by the Chairman at the Monetary Policy Meeting held on April 27, 2020, on a possible new measure to provide funds to financial institutions,” said the announcement.
Yesterday, Japan reported an annualized contraction of 3.4% for its 1Q20 GDP, which was the second quarter that Japan faced with a contracted economy. Due to the coronavirus outbreak, the fallout in the first quarter led Japan to a technical recession.
Analysts said things are expected to get worse, as the world’s third-largest economy undergoes its biggest challenge since World War II.
The Abe government has already passed an emergency stimulus package of nearly 108 trillion yen ($1 trillion), and planned more, to help households and businesses suffering from the impact of the covid-19 outbreak.