Article by ForexTime
After months of speculation by the markets, the Bank of Japan finally expanded its monetary stimulus programme on Friday. The move comes as the early gains from Japanese prime minister Shinzo Abe’s economic revival campaign have faded.
The BoJ said in a statement that it would expand the country’s monetary base at an annual pace of about Y80 trillion per year, from the Y60tln-70tln level it has targeted since last April in what was already an aggressive asset purchasing scheme.
Data released earlier on Friday showed the bank is far from achieving the 2 per cent inflation target it had set for next year.
The BoJ has pursued this goal as a means of dragging the nation out of the deflation that for decades had drained corporate confidence and prompted consumers to put off big purchases as a hangover from the late-1990s banking crisis.
In September, core consumer price inflation in Japan, excluding the effects of a tax hike in April, slipped to 1 per cent.
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In a statement, the BoJ said there was now a risk Japan’s “deflationary mindset” may not reverse unless it took more action.
Article by ForexTime
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