'Experts have estimated that the holding of a special council would be in line with the policy adopted by BoJ, Japan's central bank, in 2015', EFE news reported.
Bank of Japan (BoJ) is likely to arrange an emergency meeting to send a strong message to calm the markets, in response to the potential outcome of the ‘Brexit’ (Britain’s exit from the European Union) referendum, to be held on Thursday.
Experts have estimated that the holding of a special council would be in line with the policy adopted by BoJ, Japan’s central bank, in 2015, when it opted to reduce the number of policy meetings and “would deal with major financial and economic fluctuations through emergency meetings”, EFE news reported.
As well as the BoJ, the central banks of the major world economies have already prepared a safety net in case British voters decide to vote in favour of leaving the EU in the referendum.
The framework for supplying the markets with a massive infusion of dollars is already prepared to counter a hypothetical collapse of the pound, so in principle, it is not necessary for the BoJ to hold the special meeting on monetary policy.
However, many economists believe that if ‘Brexit’ happens, and it pushes the Japanese yen below 100 yen to the US dollar, the BoJ will not be able to wait for the regular meeting to be held on July 28-29 and will likely arrange the emergency meeting.
Together with the massive infusion of US dollars, the BoJ emergency meeting will “send a strong message” to investors, Yuji Saito of Credit Agricole explained to Nikkei.
Bank of Japan Governor Haruhiko Kuroda has insisted on remaining mute.
“We are always prepared to engage in additional monetary easing, but I will not give any comment regarding an unscheduled meeting,” said Kuroda at a press conference last week when asked about the subject.