Dow Jones Stock Market Today – BOJ Introduces Lending Facility for Climate Change
By Megumi Fujikawa
TOKYO–The Bank of Japan on Friday said it would introduce a lending facility to help banks finance projects connected to climate change.
The central bank said climate change would have an “extremely large impact” over the long term on the economy, prices and financial conditions.
The climate-change lending program, to be inaugurated this year, will build on a previous program to help banks extend loans to growth sectors of the economy.
Also Friday, the BOJ extended its special lending program for companies affected by the pandemic by six months to March 2022 and reaffirmed that it would keep its current easy monetary policy. Under the lending program, the BOJ offers zero-rate loans to commercial banks to pass on to cash-strapped companies and gives the banks incentives for doing so.
The BOJ maintained its target for short-term interest rates at minus 0.1% and its target for the 10-year Japanese government-bond yield at around zero.
In the U.S., unlike Japan, higher inflation expectations have raised the prospect of rate increases on an earlier schedule. Federal Reserve officials’ projections this week showed they anticipated raising their benchmark rate to 0.6% from near zero by the end of 2023. In March, they expected to hold it steady through that year.
Japan’s services sector is still struggling, as the government has repeatedly extended a state of emergency and asked restaurants and bars to close early or refrain from serving alcohol. The latest state of emergency in Tokyo and other major cities will end Sunday.
The BOJ also kept the ceiling for annual stock purchases at 12 trillion yen, equivalent to $109 billion. However, the central bank hasn’t been buying any shares recently. In March, the BOJ dropped an earlier target of adding Y6 trillion annually in holdings of exchange-traded stock funds, or ETFs.
Write to Megumi Fujikawa at [email protected] Zoom.com
(END) Dow Jones Newswires
June 18, 2021 00:07 ET (04:07 GMT)
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