At its 14 February monetary policy meeting, the Bank of Japan (BoJ) decided to establish its first ever inflation goal of an annual 1% for the time being, in a move that was widely seen as a further commitment by the Bank to counter persistent deflation. In its statement, the BoJ will ?pursue powerful monetary easing by conducting its virtually zero interest rate policy and by implementing the Asset Purchase Program mainly through the purchase of financial assets.? Accordingly, the policy board of the BoJ decided unanimously to increase the amount of the Asset Purchase Program by about JPY 10 trillion (USD 128 billion) to JPY 65 trillion (USD 832 billion). The program's increased funds are earmarked for the purchase of Japanese government bonds. The BoJ's latest measure is in line with moves by major central banks in most of the advanced economies, which aim at pumping fresh money into the economy amid a context of almost-zero interest rates. The Bank also decided to leave the collateralized overnight call rate unchanged at around 0 to 0.1%.
Japan Monetary Policy
Japan sets inflation goal and increases asset purchase program
February 14, 2012
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Japan Economic News
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