Japan | BoJ introduces new scheme to address climate change
Beyond leaving monetary policy settings unchanged at meeting on 18th June, the Bank of Japan also extended the deadline of its funding-for-lending scheme targeted at the victims of pandemic to March 2022 from September 2021. With additional incentives from the tweaked reserve-tiering system, the scheme will encourage banks to support firms’ balance-sheet adjustment in coming years.
What you will learn:
- Surprisingly, the BoJ also announced its plan to start a new funding-for-lending scheme to address climate change before the end of this year.
- Since strengthening incentives for funding-for-lending schemes at the March meeting, the BoJ had hinted it would expand the scope of the schemes to address various structural challenges including climate change.
- With little room left for a rate cut and less appetite for asset purchases, the BoJ can still add to its easing efforts, even with limited impact.
BoK’s monetary policy to tighten even as hiking cycle ends
Even without rate hikes, central banks' monetary policies can effectively tighten if the nominal neutral rate falls below the policy rate. We expect this will be the case for the Bank of Korea this year, as the gap between the policy rate and the nominal neutral rate widens.Find Out More
Why China isn’t about to save the world economy
The earlier and faster than expected ending of zero-Covid restrictions in China bodes well for the global economy and adds to the recent run of positive news.Find Out More