Bank of Japan extends measures to maintain repo market
27 April 2020 Japan
Image: Tunisian/Shutterstock.com
The Bank of Japan (BoJ) is extending its emergency measures on its securities lending programme in response to the tightening supply of Japanese government securities (JGSs) that has come from its massive asset purchase programme.
In March, the central bank increased the number of JGS issues offered through its Securities Lending Facility (SLF) and also relaxed the upper limit on the number of JGS issues allowed for the submission of bids for the SLF.
The measures were set to run until 30 April but will now be extended beyond that date. BoJ did not offer a new deadline for the extensions to expire.
The rule changes came as part of a radical package of fiscal responses aimed to mitigate market disruption brought on by the COVID-19 pandemic.
BoJ says it is also going to conduct the outright purchases of JGS “in a flexible manner”, which will take effect from 28 April.
The bank will announce the schedule separately in a monthly schedule of outright purchases of JGS, a competitive auction method.
In March, the central bank increased the number of JGS issues offered through its Securities Lending Facility (SLF) and also relaxed the upper limit on the number of JGS issues allowed for the submission of bids for the SLF.
The measures were set to run until 30 April but will now be extended beyond that date. BoJ did not offer a new deadline for the extensions to expire.
The rule changes came as part of a radical package of fiscal responses aimed to mitigate market disruption brought on by the COVID-19 pandemic.
BoJ says it is also going to conduct the outright purchases of JGS “in a flexible manner”, which will take effect from 28 April.
The bank will announce the schedule separately in a monthly schedule of outright purchases of JGS, a competitive auction method.
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