The Bank of Japan maintained its massive monetary stimulus and announced the introduction of a new funding programme to support the efforts on climate change issues and also extended the deadline for Covid support programme.

The board, governed by Haruhiko Kuroda, on Tuesday, voted 7-1, with 1 abstention, to hold the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank.

The bank will continue to purchase a necessary amount of Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around zero percent.

Tom Learmouth, an economist at Capital Economics, expects the BoJ to leave both its policy rate and target for 10-year government bond yields unchanged for the foreseeable future.

The bank decided by an 8-0 majority vote, with 1 abstention, to extend the duration of the Special Program to Support Financing in Response to the Novel Coronavirus.

The deadline for new loan application will end on March 2022 instead of September 2021.

Further, the BoJ judged it appropriate to introduce a new fund-provisioning measure, through which it provides funds to financial institutions for investment or loans that they make to address climate change issues.

The bank plans to launch the new measure likely within 2021. The preliminary outline of the measure will be unveiled at the July monetary policy meeting.

This new measure will be a successor to the Fund-Provisioning Measure to Support Strengthening the Foundations for Economic Growth, BoJ said.

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