Bank of Japan adopts unlimited JGB purchases to buoy economy in pandemic

The Bank of Japan expanded monetary stimulus on Monday and pledged to buy unlimited amount of bonds to keep borrowing costs low as the government tries to spend its way out of the deepening economic pain from the coronavirus pandemic.

The move puts the BOJ in line with other major central banks that have unleashed unprecedented amounts of monetary support as the health crisis stokes fears of a deep global recession.

The central bank also sharply cut its economic forecast and projected inflation would fall well short of its 2 percent target for three more years, suggesting its near-term focus will be to battle the crisis.

“The spread of the coronavirus at home and abroad is inflicting a severe impact on Japan’s economy,” BOJ Gov. Haruhiko Kuroda told a news conference after the policy meeting in Tokyo.

“The achievement of the BOJ’s 2 percent inflation target … will take time. The outlook for prices is highly uncertain,” he added.