BOJ maintains ultraloose monetary policy to support virus-hit economy

The Bank of Japan left its ultraloose monetary policy unchanged Thursday to support the economy amid the coronavirus pandemic, with Governor Haruhiko Kuroda expected to announce the central bank will closely cooperate with new prime minister Yoshihide Suga. At the end of its two-day policy meeting, the central bank maintained short-term interest rates at minus 0.1 percent while guiding long-term rates to around zero percent. It will also continue with measures to facilitate fundraising by struggling companies. "Japan's economy has started to pick up with economic activity resuming gradually, although it has remained in a severe situation due to the impact of the novel coronavirus at home and abroad," the BOJ said in a statement. Under its massive asset-purchasing program, the bank will keep buying government bonds from financial institutions without setting a limit and exchange-traded funds at an annual pace of 12 trillion yen ($114 billion). The BOJ maintained support measures for corporate finance, including providing cheap funds to banks that extend interest rate-free loans to struggling companies under a government program and buying up to 20 trillion yen in corporate bonds and commercial papers from lenders to ensure ample liquidity in the banking system. Suga launched his Cabinet on Wednesday, inheriting former Prime Minister Shinzo Abe's "Abenomics" policy mix of monetary and fiscal stimulus and structural reforms. The BOJ had joined Abe's efforts to beat chronic deflation in Japan, introducing unprecedented monetary easing programs to lift the country's inflation rate to 2 percent, the goal that the bank has failed to achieve for more than seven years. Related coverage: Suga becomes Japan PM, forms continuity Cabinet as Abe era ends FOCUS: Early election may be key to keeping Suga gov't afloat beyond 2021 Suga's continuity policy gives market firm footing, focus now on snap poll