(Reuters) – The Bank of Japan will discuss scrapping its cap on government bond purchases at its next policy meeting on April 27, the Nikkei newspaper said, looking to cushion the economy against a sharp downturn caused by the coronavirus outbreak.
The BOJ will also consider a sharp increase in the amount of commercial paper and corporate bonds it purchases, the Nikkei said on Thursday, without saying where it got the information.
The moves highlight the dilemma faced by the BOJ, which wants to boost support for companies while avoid cutting rates, which could encourage people to leave their homes to splurge and undermine government efforts to curb the outbreak.
The BOJ will discuss removing its cap on government bond purchases, now set at around 80 trillion yen ($743 billion) a year, the Nikkei said, allowing the bank to purchase as much debt as it deems necessary.
Sources have previously told Reuters that at next week’s rate review the BOJ is expected to take further steps to ease funding strains for firms hit by the pandemic, such as boosting purchases of corporate bonds and commercial paper.
(Reporting by David Dolan; Editing by Mark Heinrich)
