Photo/Illutration Bank of Japan Governor Haruhiko Kuroda enters the central bank’s head office in Tokyo on April 27. (The Asahi Shimbun)

The Bank of Japan expanded monetary stimulus on Monday for the second straight month to ease corporate funding strains and finance huge government spending aimed at combating the deepening economic fallout from the coronavirus pandemic.

The move puts the BOJ in line with other major central banks that have unleashed unprecedented amounts of monetary support amid the health crisis.

The BOJ boosted the maximum amount of corporate bonds and commercial paper it pledges to buy to a combined 20 trillion yen ($186 billion) from around 7 trillion yen.

The central bank also clarified its commitment to buy unlimited amounts of government bonds by scrapping loose guidance to buy them at an annual pace of 80 trillion yen.

"The BOJ will purchase necessary amounts of government bonds without setting an upper limit, so that the 10-year bond yield will remain at around 0%," the central bank said in a statement announcing the policy decision.

At the meeting on Monday, cut short by a day as a precaution against the spread of the pandemic, the BOJ kept its interest rate targets unchanged, as had been widely expected.

BOJ Governor Haruhiko Kuroda will hold a news conference to explain the policy decision at 3:30 p.m.

Under a policy dubbed yield curve control, the BOJ targets short-term interest rates at -0.1% and 10-year bond yields around 0%. It also buys government bonds and risky assets to pump money aggressively into the economy.

The BOJ's rate review precedes those this week by the Federal Reserve and the European Central Bank, which have sailed into uncharted territories to keep their economies afloat.

Corporate funding costs have crept up in Japan despite the BOJ's decision last month to boost buying of risky assets, including corporate bonds and commercial debt, and create a loan program to assist funding of firms hit by the pandemic.

Removing the guidance on its bond buying is largely a symbolic move. The BOJ has only purchased less than 20 trillion yen per year, as the bank's huge presence in the market allows it to control yields with fewer purchases.

Japan expanded a state of emergency this month that asks citizens to stay home and businesses to close, adding to woes for an economy already on the cusp of recession.

To ease the pain on the economy, the government boosted its spending package last week to a record $1.1 trillion yen, which will be paid for partly by issuing more bonds--straining Japan's already tattered finances.