18 Feb 2014
BoJ surprises market by expanding loan programs
FXStreet (Bali) - The main catalyst behind the Yen decline after the BoJ monetary policy announcement was the expansion and enlargement of the two lending programs, set to expire at the end of March. Both loan schemes are aimed at providing low interest rate loans to commercial banks in order to boost economic growth in the country.
As reported by the Washington Journal: "One of the programs aims to channel money into sectors of the economy BOJ officials believe have high growth potential, such as health care and tourism. The BOJ extended the program’s expiry by one year, and doubled its size by to ¥7 trillion ($68 billion). The fund was already near its initial ¥3.5 trillion ceiling."
As per the second program, the WSJ adds: "The other program rewards banks that have increased their outstanding loans, by allowing them to refinance new loans with cheap cash from the central bank The BOJ, which has so far offered ¥5 trillion through this program, pushed back the expiry date of this program by one year and the BOJ added it will lend twice as much as the net increase in banks’ outstanding loans."
The decision taken by the BoJ has been graciously welcomed by the Nikkei 225, doubling up gains to currently stay around the +2% mark, while the USD/JPY breaks 102.50+.
As reported by the Washington Journal: "One of the programs aims to channel money into sectors of the economy BOJ officials believe have high growth potential, such as health care and tourism. The BOJ extended the program’s expiry by one year, and doubled its size by to ¥7 trillion ($68 billion). The fund was already near its initial ¥3.5 trillion ceiling."
As per the second program, the WSJ adds: "The other program rewards banks that have increased their outstanding loans, by allowing them to refinance new loans with cheap cash from the central bank The BOJ, which has so far offered ¥5 trillion through this program, pushed back the expiry date of this program by one year and the BOJ added it will lend twice as much as the net increase in banks’ outstanding loans."
The decision taken by the BoJ has been graciously welcomed by the Nikkei 225, doubling up gains to currently stay around the +2% mark, while the USD/JPY breaks 102.50+.