you are here: HomeNewsWorld

Japan central bank eases monetary policy to counter pandemic

The Bank of Japan decided at a meeting Monday to ease monetary policy, including expanding the purchase of commercial papers and corporate bonds, which work to deliver cash to companies.

April 27, 2020 / 10:10 AM IST

Japan's central bank is making it easier for cash-strapped companies to get funding in response to the growing economic devastation from the coronavirus pandemic.

The Bank of Japan decided at a meeting Monday to ease monetary policy, including expanding the purchase of commercial papers and corporate bonds, which work to deliver cash to companies.

In a move that was widely expected, the central bank also decided to remove the ceiling on its purchases of government bonds. It already has been purchasing trillions of yen (tens of billions of dollars') worth of government bonds to counter deflation.

Its latest steps are similar to what central banks around the world are doing to curtail the massive damage the outbreak is unleashing on company profits and business activity.

The benchmark Nikkei 225 stock index jumped 2.4% by midday Monday.

Close

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

“Japan's economy has been in an increasingly severe situation due to the impact of the spread of the coronavirus at home and abroad,” the Bank of Japan said in a statement.

Additional monetary easing may be needed, and the central bank was closely monitoring the situation, it said.

The bank issued a separate statement reiterating that the economy was in a serious state but was expected to improve once the impact from the pandemic declines. It also warned much remains unclear.

Japan has reported about 13,000 coronavirus cases so far, and fewer than 400 deaths. As is true elsewhere, the number of confirmed cases is thought to understate the actual number of those who may have been infected.

Restaurants, concerts and other events have closed, and tourism is practically at a standstill. Auto factories have suspended production and people are being asked to work from home and stay home.

Japan's economy, the world's third largest, is dependent on exports, centered around products like cars and electronics goods.

But it's also driven by small and medium size businesses, which analysts say are at major risk from the social distancing restrictions aimed at curbing the spread of the coronavirus.

The economy contracted at a 7.1% annual rate during the October-December period and is thought to be already in a recession, though data for the full first quarter of this year have not yet been released.
PTI
first published: Apr 27, 2020 09:55 am

stay updated

Get Daily News on your Browser
Sections