TOKYO • The Bank of Japan (BOJ) kept monetary settings steady yesterday and stuck to its view that the economy will gradually recover from the coronavirus pandemic, signalling that it has taken enough steps to support growth for now.

To clarify the scale of its money printing, the central bank said it plans to pump US$1 trillion (S$1.4 trillion) to cash-strapped firms through a range of crisis response tools announced so far.

While the BOJ remains focused on steps to ease corporate funding strains, governor Haruhiko Kuroda may offer hints on how it will deal with longer-term issues such as how to fire up growth and inflation when the pandemic begins to subside.

The BOJ said in a statement: "Although economic activity will gradually resume, Japan's economy will remain in a severe state for the time being."

It added: "Once the impact of the pandemic subsides, the economy is likely to improve."

In a widely expected move, the BOJ maintained its yield curve control targets at minus 0.1 per cent for short-term interest rates and 0 per cent for long-term interest rates.

The central bank also made no major changes to its programmes to ease corporate funding strains, including a lending facility aimed at channelling funds to firms.

Due to the way it is designed, the size of money to be pumped out via the programmes will reach 110 trillion yen (S$1.4 trillion) if more loans are taken out via government schemes, the BOJ said.

REUTERS