Bank of Japan Governor: "Will Not Hesitate to Implement Appropriate Measures if Necessary in Response to COVID-19"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As the spread of the novel coronavirus infection (COVID-19) has increased volatility in global foreign exchange markets and stock markets, Haruhiko Kuroda, Governor of the Bank of Japan (BOJ), met with Prime Minister Shinzo Abe on the 12th to discuss the current economic situation and stated that he would "not hesitate to implement appropriate measures" to defend against the stock price decline.

According to NHK and other broadcasts, Governor Kuroda and Prime Minister Abe held an emergency meeting at the Prime Minister's Office on the same day to discuss responses to the sharp decline in major indices of the Tokyo Stock Exchange and the unstable foreign exchange market, including the yen's appreciation, due to the spread of COVID-19. This was their first meeting at the Prime Minister's Office in six months since September last year.

After the meeting, Governor Kuroda told reporters, "To respond to changes in the financial market, we will supply abundant liquidity to the market and strive to stabilize the market through appropriate asset purchases." He added that he would closely monitor the situation and "not hesitate to implement appropriate responses in a timely manner as necessary."

Their meeting took place amid increased market volatility caused by the recent spread of COVID-19, which led to a stock market crash and continued yen appreciation. On the afternoon of the same day, the Nikkei 225 index was trading down more than 4%. The decline was initially in the 1% range at market opening but widened to over 5% after U.S. President Donald Trump delivered a national address including a ban on entry from Europe, before partially adjusting. The psychological support level of 19,000 yen was also broken that day. The dollar-yen exchange rate, which had risen to the 106 yen range per dollar the previous day, fell back to the high 103 yen range per dollar, further increasing the decline.

The BOJ plans to expand its purchases of exchange-traded funds (ETFs) to defend stock prices. To supply abundant liquidity to the financial market, the BOJ will flexibly respond without being constrained by the current annual target of 6 trillion yen (approximately 69 trillion won) for ETF purchases.

This content was produced with the assistance of AI translation services.