What did the BOJ do? Details of decision
The Bank of Japan eased policy at today’s meeting, but did less than the market has expected. The regulator doubled purchases of exchange-traded funds (ETF), so that its total holdings will increase at an annual pace of 6 trillion yen ($58 billion), up from the current 3.3 trillion yen. The BOJ also doubled the size of a lending program for local companies to $24 billion. The decision was not unanimous; the vote count was 7 against 2. Japanese central bank cited the Brexit vote, slowdown in emerging economies and market volatility as the reason why it had to act.
At the same time, the regulator kept rates steady and its base money target remained at 80 trillion yen and didn’t change the pace of purchases for other assets including Japanese government bonds. Yet, the BOJ did promise to conduct a thorough assessment of the effects of negative interest rates and its massive asset-buying program.
USD/JPY fell to 102.70 on the announcement.