The Bank of Japan's (BOJ) decision to take further monetary policy easing measures to help mitigate the impact of Covid-19 spread on the economy.
At their one-day meeting as a precaution against the spread of Covid-19, the BOJ's monetary policy makers agreed to keep short-term benchmark interest rates negative at 0.10%, which was in line with expectations.
The BOJ announced expansion in stimulus measures, as the Bank of Japan raised the cap on the purchase of corporate bonds and commercial securities to 20 trillion yen from 7 trillion yen before.
The bank also clarified its commitment to purchase unlimited amounts of government bonds by cancelling the previous guidance for purchasing them at an annual rate of about ¥80 trillion.
"The Bank of Japan will buy the necessary amounts of government bonds without setting a cap, keeping the yield of 10-year bonds at about zero percent," the BoJ statement said.
The BoJ said it was "appropriate to strengthen flexible monetary policy" by increasing purchases of commercial securities and corporate bonds, increasing corporate loans to deal with the pandemic and buying more government bonds.
"Japan's economy is in a more difficult position due to the impact of the new coronavirus outbreak at home and abroad," the bank added.
Japan's economy had already been hurt by the repercussions of the consumer tax increase before the Corona crisis eruption.
The world's third-largest economy contracted 7.1% in the fourth quarter of last year, following the implementation of Prime Minister Shinzo Abe's decision to increase consumption tax from 8% to 10%, as of October 1, amid weak spending and slowing wage growth.
As of 10:14 GMT, the Japanese yen was 0.3 percent up versus the U.S. dollar at 107.18,
extending its rise for a fourth straight session.