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Bank of Japan maintains negative interest rate policy

The Bank of Japandecided to maintain itsnegative interest rate regime and hold its quantitative and qualitative easing programstable.

The central bank said April 28 that it will continue to conductmoney market operations so that the monetary base will increase at an annual paceof about ¥80 trillion and continue to increase its government debt holdings by thesame amount every year.

The central bank will purchase exchange-traded funds and Japanreal estate investment trusts so that their amounts outstanding will increase atannual paces of about ¥3.3 trillion and about ¥90 billion, respectively. The centralbank will also keep its outstanding holdings of commercial paper and corporate bondsat ¥2.2 trillion and ¥3.2 trillion, respectively.

In a 7-2 majority vote, the central bank decided to continueapplying a negative interest rate of minus 0.1% to the policy rate balances in currentaccounts held by financial institutions at the bank.

In addition, the Bank of Japan said it decided to introduce a¥300 billion funds-supplying operation for financial institutions in disaster areasaffected by the Kumamotoearthquakes. The central bank will provide the loans at a zero interest rate.

As of April 27, US$1 wasequivalent to ¥111.27.