18 Feb 2014
Flash: BoJ keeps QE unchanged but expands FFL - Danske Bank
FXStreet (Barcelona) - Flemming Jnielsen, Senior Analyst at Danske Bank notes that the Bank of Japan (BoJ), in connection with today’s monetary meeting. kept its QE programme unchanged but expanded its funding for lending facilities markedly.
Key Quotes
“The target for expansion in the monetary base (the main policy instrument) was maintained at JPY60-70trn annually. However, the size of the funding for lending facilities was doubled. The funding for lending facilities, among other things, allow banks to fund net increases in lending at very low interest rates.”
“The maturities of these lending facilities were also extended. While today’s move is not a big easing one, it nonetheless underscores that BoJ continues to have an aggressive easing bias. Notably BoJ’s statement on the economy and risks was unchanged from January, so on the surface it does not appear that BoJ has changed its view on the economy on the back of the disappointing Q4 GDP data released yesterday.”
“However, the recent appreciation of JPY has been unwelcome and today’s easing move underscores that any substantial appreciation of JPY will probably be met by a relatively fast policy response from BoJ.”
Key Quotes
“The target for expansion in the monetary base (the main policy instrument) was maintained at JPY60-70trn annually. However, the size of the funding for lending facilities was doubled. The funding for lending facilities, among other things, allow banks to fund net increases in lending at very low interest rates.”
“The maturities of these lending facilities were also extended. While today’s move is not a big easing one, it nonetheless underscores that BoJ continues to have an aggressive easing bias. Notably BoJ’s statement on the economy and risks was unchanged from January, so on the surface it does not appear that BoJ has changed its view on the economy on the back of the disappointing Q4 GDP data released yesterday.”
“However, the recent appreciation of JPY has been unwelcome and today’s easing move underscores that any substantial appreciation of JPY will probably be met by a relatively fast policy response from BoJ.”