Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Cancel Anytime
Enjoy Unlimited Digital Access
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Bank of Japan Governor Haruhiko Kuroda speaks at a news conference in Tokyo on March 16, 2020.


The Bank of Japan joined other major central banks Monday in expanding its already unprecedented levels of monetary support for financial markets and companies battered by the outbreak of the coronavirus.

The BoJ announced after an emergency policy meeting that it would expand its purchases of stocks, bonds and other assets and provide zero-interest, one-year loans to companies running short of cash to help the economy weather the impact of the virus outbreak.

The co-ordinated moves by the U.S. Federal Reserve, European Central Bank and BoJ were followed by rate cuts in South Korea and in Hong Kong, where the currency is pegged to the U.S. dollar.

Story continues below advertisement

They failed to impress financial markets, which resumed their declines as Wall Street futures traded 5 per cent lower.

Japan’s Nikkei 225 index slipped 2.5 per cent, closing at 17,002.04. Other markets saw much bigger losses, with Australia’s benchmark plunging 9.7 per cent and the Paris CAC 40 down 7.6 per cent.

The BoJ is thought to have limited room for manoeuvring after having cut its key policy rate to minus 0.1 per cent several years ago as part of a massive, prolonged effort to use cheap credit to keep the economy growing. It also has been purchasing hundreds of billions of dollars’ worth of Japanese government bonds and other assets to help put more cash into the markets.

BoJ Governor Haruhiko Kuroda had earlier pledged to do whatever is needed to help support the economy as Japan struggles to contain the spread of the virus that causes COVID-19. So far, the BoJ has avoided taking interest rates still lower. Mr. Kuroda told reporters that was still possible, but he said cutting rates further would hit already weak bank profit margins.

“The Bank will closely monitor the impact of COVID-19 for the time being and will not hesitate to take additional easing measures if necessary,” he said in a statement.

Prime Minister Shinzo Abe requested that schools be closed and companies allow employees to work remotely to enable people to help prevent the spread of the virus. In some areas of Japan, local authorities have taken more stringent action. The loss of business activity and a downturn in tourism have added to worries over the economic outlook.

For most people, the coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia.

Story continues below advertisement

The virus has infected nearly 170,000 people worldwide and killed more than 6,500. More than 77,000 people have recovered. Japan has reported more than 1,500 cases, but nearly 700 of those were from a cruise ship that was kept in offshore quarantine for weeks before its passengers and crew were allowed to disembark.

Mr. Kuroda told reporters in a televised news conference that the rapid spread of the virus made it urgent to act more quickly to stabilize markets and ensure that companies, especially the small and medium-sized enterprises that provide most jobs, have enough cash to keep going.

The BoJ’s unprecedented levels of “qualitative and quantitative easing” helped end a long spell of deflation, but have not boosted growth as much as expected. With an aging and shrinking population, the country faces an uphill battle in getting companies to invest in domestic manufacturing or boost wages. But the jobless rate has remained low because the number of workers is also on the decline.

Japan’s economy, the world’s third largest, contracted at a 7.1-per-cent annual pace in the most recent quarter and is expected to shrink further in this quarter given the shock from the coronavirus outbreak.

Many fear Mr. Kuroda’s “big bazooka” of monetary easing, as he has called it, may soon run out of ammunition.

Still, the extra cash from the BoJ could help companies alleviate their struggles with financing, Harumi Taguchi of IHS Markit said in a commentary.

Story continues below advertisement

“That said, the BoJ may need to consider additional easing or extend the period for special fund-supply operations and additional asset purchasing, given that it is unclear how long it would take to contain COVID-19,” she said.

Early Monday, the BoJ, Bank of Canada, Bank of England, European Central Bank, U.S. Federal Reserve and Swiss National Bank announced a co-ordinated plan to increase cash in the markets using U.S. dollar “liquidity swap line arrangements,” offering U.S. dollars weekly in each jurisdiction with an 84-day maturity on top of the usual measures.

Apart from slashing the U.S. benchmark interest rate to near zero, the Fed said it was buying US$700-billion in bonds to help smooth disruptions in the Treasury market.

The surprise intervention reflected that the Fed views the economy as being on the brink of recession and has signalled it will do all it can to minimize the blow to households, companies and the markets.

Asked how he was coping with the virus outbreak, Mr. Kuroda, who is 75, said he was holding some meetings remotely and trying his best not to go out very much.

“I went to the bookstore and bought a bunch of books to read,” he said.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies