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“The swift and abundant liquidity provision from central banks, international institutions prevented negative feedback loop between economic and financial activities,” Bank of Japan (BOJ) Governor Haruhiko Kuroda said on Tuesday, per Reuters. However, Kuroda further acknowledged that a “considerable uncertainty is continuing.”

Additional takeaways

“Coordination of fiscal and monetary policies were more prompt, comprehensive this time than during the global financial crisis.”

“Deferral of full implementation of the Basel III standards, encouragement for banks to use capital, liquidity buffers have contributed to securing smooth functioning of financial intermediation.”

“Due attention must be paid to the possible shift in challenges facing firms, households from liquidity to solvency could affect the future financial system.”

“Digitalization and cybersecurity are becoming increasingly important with the spread of COVID-19, such initiatives could be driving force for raising potential growth.”

“It will be necessary to examine carefully structural changes in the financial system, given the growing importance of non-banks in financial intermediation.”

Market reaction

The USD/JPY pair largely ignored these comments and was last seen losing 0.06% on the day at 104.48.

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