BOJ INTRODUCED A NEW FUND SUPPLYING MEASURE

The BoJ introduced a new fund-supplying measure for financial institutions against pooled collateral for up to 1 year at a rate of 0%.

Highlights:

  • The Bank of Japan (BoJ) held an unscheduled policy meeting today.
  • It introduced a new scheme which offers loans against pooled collateral to financial institutions at an interest rate of 0% with maturity of up to one year.
  • The measure is geared towards supporting financing for small and medium-sized enterprises (SMEs).
  • The BoJ also decided to extend its existing measures until the end of March 2021.
  • While today’s measures are welcome support, we do not expect the BoJ to touch its current rates within its yield curve control approach.

Download the full publication below

BOJ INTRODUCED A NEW FUND SUPPLYING MEASURE

RELATED INSIGHTS

CHINA’S RECOVERY CONTINUED BUT A BIT SOFTER THAN EXPECTED
China's economic recovery continued in Q3 2020, although a bit softer than expected. Real GDP growth rose to 4.9% yoy, slightly below the Reuters consensus expectation of 5.2% yoy, but still a substantial upturn from the 3.2% yoy in Q2. On a quarterly base, growth dynamics softened to 2.7% qoq, after 11.7% qoq and -10% qoq in the two previous quarters.
COVID-19 FACTS & FIGURES
According to the IMF’s Managing Director, strong international cooperation on coronavirus vaccine could speed up the world economic recovery and add $9 trillion to global income by 2025. A WHO trial found that Remdesivir, Hydroxychloroquine, Lopinavir and Interferon have little or no effect on hospitalized Covid-19 patients. Gilead Sciences has questioned the findings of the WHO study saying data appeared inconsistent.
Q3 EARNINGS SEASON STARTS WELL. EXPECT STABILIZATION IN REVISIONS MOMENTUM BUT RECOVERY WILL CONTINUE
The Q3 reporting season has just started. For the US, expectations are for a yearly earnings growth of -21% after -31% in Q2. As for sectors, worse growth rates in the US are expected for energy, industrials and discretionary while pharma, utilities, IT and staples should rank better than the index.