TOKYO (Reuters) – The Bank of Japan is set to boost funding support for companies, but it will avoid cutting interest rates, sources say, as it could encourage people to step out of their homes to splurge and undermine government efforts to curb the coronavirus outbreak. FILE PHOTO: A man runs past the Bank of Japan building in Tokyo, Japan, July 29, 2016. REUTERS/Kim Kyung-Hoon/File Photo The dilemma for the BOJ underlines the difficulties of managing Japan’s approach to controlling the spread of the virus, which lacks punitive measures applied in lockdowns of many Western countries. At next week’s rate review, the BOJ is expected to take further steps to ease funding strains for companies hit by the pandemic such as boosting purchases of corporate bonds and commercial paper (CP), sources have told Reuters. More radical monetary easing steps to spur demand – such as interest rate cuts – are off the table as they could hamper government efforts to keep households home and businesses shut, said sources familiar with the BOJ’s thinking. “There’s no doubt the economy is in a pretty bad shape. But taking steps to boost demand now would stimulate consumption and risk spreading the virus,” one… Read full this story
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