The Bank of Japan has joined other central bank with a measure to support climate change mitigation. It has also extended the expiration of Covid-19-era lending measures by six months.
Previously, the Bank of England announced last month that it will shift corporate bond purchases toward firms doing the most to fight climate change.
“The bank considers that supporting the private sector’s efforts on the issues from a central bank’s standpoint will contribute to stabilizing the macroeconomy in the long run,” the bank said in a statement.
“The BOJ is showing its will to deal with the climate change problem,” said Norinchukin Research Institute economist Takeshi Minami. “They are following the global trend as private companies start taking action, but this is different from monetary easing.”
The BOJ currently has a negative interest rate and plans for asset purchases. This is in contrast to that of the US Federal Reserve, the Reserve Bank of Australia and other central banks.
“I hope they won’t use this climate effort to try to deflect attention from their failing progress on inflation,” said Credit Agricole Securities Asia BV economist Kyohei Morita.
“This won’t bring them any closer to their distant price target and they are probably aware of that.”