Japan BOJ Expects Shock Worse Than 2008 Financial Crisis... "Growth Rate from 0.9% to -3%~-5%"

[Asia Economy Reporter Naju-seok] The Bank of Japan, Japan's central bank, forecasted on the 27th that the Japanese economy will record a growth rate between -3% and -5% this year due to the impact of the novel coronavirus infection (COVID-19).

The Bank of Japan held a monetary policy meeting on the same day and decided on additional monetary easing. Previously, the Bank of Japan had significantly lowered its forecast for Japan's economic growth this year from 0.9%.

What is particularly notable is that the growth rate forecast due to COVID-19 was seen as a shock greater than expected. During the 2008 Lehman Shock, the Japanese economy recorded a growth rate of -3.4%.

To respond to the economic shock, the Bank of Japan decided to temporarily remove the limit on government bond purchases. This is to ensure that funds can be supplied at low interest rates. Additionally, to support corporate financing, purchases of corporate bonds and commercial paper (CP) will be significantly expanded from a total of 7.4 trillion yen to a total of 20 trillion yen.

The Bank of Japan decided to maintain the short-term policy rate at -0.1% and the long-term interest rate at 0%.

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