Mar 16 ,2020. 32 minutes ago – 10:12 – KYODO NEWS

TOKYO – The Bank of Japan said Monday it will hold a one-day policy meeting from noon following the emergency U.S. rate cut, moving forward what was originally scheduled to be a two-day gathering starting Wednesday amid growing concern over the coronavirus epidemic’s economic impact.

The BOJ’s meeting follows the U.S. Federal Reserve’s decision on Sunday to cut its target range for the federal funds rate by 1.00 percentage point to 0.00 to 0.25 percent, the lowest level since late 2015.

At the meeting later in the day, the BOJ Policy Board is expected to discuss further monetary easing steps such as cutting interest rates further into negative territory and an increase in asset purchases.

Six central banks, including the BOJ, the Fed and the European Central Bank, also said they will take coordinated action to enhance the provision of U.S. dollar liquidity.

Prime Minister Shinzo Abe said Monday leaders of the Group of Seven industrialized counties will hold an emergency videoconference from 11 p.m. Japan time to discuss their response to the global spread of the coronavirus.

The spread of COVID-19 has weighed on a wide range of economic activities in the tourism, retail and manufacturing sectors.

BOJ Governor Haruhiko Kuroda said earlier this month in a rare emergency statement that the Japanese central bank will make every effort to provide ample liquidity and ensure stability in financial markets. However, recent sluggish domestic economic data has increased pressure on the central bank to take additional steps.

Japan’s economy shrank an annualized real 7.1 percent in the October-December quarter, its sharpest fall in more than five years, due to a sales tax hike and a devastating typhoon last year.

Many analysts are concerned that the world’s third largest economy may post negative growth in the January-March period for the second consecutive quarter due to the coronavirus outbreak, which originated in China late last year.

But the BOJ is widely perceived as having nearly run out of policy tools for further monetary stimulus since cutting short-term interest rates into negative territory at minus 0.1 percent in January 2016.

The BOJ last introduced additional easing measures in July 2016 when it almost doubled its purchases of exchange traded funds to an annual pace of about 6 trillion yen ($56 billion) from around 3.3 trillion yen.

CR: KYODO NEWS