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Economy

BOJ to hold an emergency policy meeting on Friday

Central bank to discuss additional fund supplies now that recession has hit

The Bank of Japan's unusual move comes amid a sharp economic downturn caused by the coronavirus.  (Photo by Yuki Nakao)

TOKYO -- The Bank of Japan on Tuesday said it will hold a special policy board meeting on May 22 to discuss its efforts to supply funds to financial institutions.

This is an unusual move for the central bank and comes amid a sharp economic downturn caused by the coronavirus.

The BOJ's next scheduled policy meeting is slated for June 15-16. In the previous meeting, on April 27, the central bank announced its intention to purchase Japanese government bonds "without upper limit" in an effort to calm financial markets as the government launched massive relief programs through deficit spending.

The announcement follows the release of Japan's gross domestic product data on Monday that shows the nation's economy had fallen into a recession. The economy shrank at an annualized pace of 3.4% in January-March, following a fall of 7.3% in October-December.

On Thursday, the government will reassess the state of emergency. The declaration may be lifted in key cities, including Tokyo and Osaka.

The government of Prime Minister Shinzo Abe is now focused on preventing the pandemic from creating a surge in bankruptcies and job losses through relief measures and emergency credit.

The government enacted an emergency relief program equivalent in size to 20% of GDP on April 30. It is set to propose a second relief program this month, hoping to get it enacted by mid-June.

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