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BOJ begins policy meeting, likely to stand pat as new PM picked

This file photo taken March 2020 shows the Bank of Japan headquarters in Tokyo. (Kyodo)

TOKYO (Kyodo) -- The Bank of Japan began a two-day policy meeting Wednesday, the day Yoshihide Suga was chosen by parliament as the country's new prime minister, at which it is expected to largely stand pat on its current monetary measures.

    The central bank will most likely maintain its ultraeasy monetary policy and its corporate support measures totaling 110 trillion yen ($1 trillion), including interest-free lending programs for companies, and corporate bond and commercial paper purchases introduced in stages since March, economists said.

    Since taking office in March 2013, BOJ Governor Haruhiko Kuroda had been closely cooperating with former Prime Minister Shinzo Abe, trying to achieve its 2 percent inflation target.

    The central bank has bought a massive amount of government bonds in monetary operations, but failed to meet its price stability target.

    Kuroda is due to meet the press on Thursday after the two-day policy meeting and market players will pay attention to his remarks regarding the new government to be led by the 71-year-old prime minister.

    Many of them expect the BOJ to take a wait-and-see stance at the meeting, as financial markets around the world have been relatively stable while output by manufacturers such as automakers has been picking up gradually despite the prolonged impact of the coronavirus pandemic.

    Suga, a former chief Cabinet secretary and the right-hand man of Abe, has pledged to keep close communication with the BOJ and continue the former prime minister's "Abenomics" economic package of aggressive monetary easing and fiscal stimulus, as well as structural reform.

    Following the previous policy meeting in July, Kuroda said the Japanese economy has been in "an extremely severe situation."

    The BOJ said at the time that it expected the country's economy to shrink 4.7 percent and the consumer price index to fall 0.5 percent in fiscal 2020 through March 2021 due to the impact of the pandemic.

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