The Bank of Japan (BoJ) has ex­tend­ed its as­set-pur­chas­ing pro­gramme by US$126 bil­lion, fol­low­ing sim­i­lar moves by the Fed­er­al Re­serve and the Eu­ro­pean Cen­tral Bank. The move, aimed at boost­ing the econ­o­my, in­creas­es the over­all size of the stim­u­lus pro­gramme to 80 tril­lion yen. Al­though the in­crease had been an­tic­i­pat­ed by some an­a­lysts, many were sur­prised by the size of it. Fi­nance Min­is­ter Jun Azu­mi said the BoJ "took more ac­tion than we an­tic­i­pat­ed."

Un­der the as­set pur­chas­ing pro­gramme the cen­tral bank buys bonds in or­der to keep the long-term cost of bor­row­ing down. The BoJ al­so left in­ter­est rates un­changed at be­tween ze­ro and 0.1 per cent. Re­cent da­ta showed that Japan's ex­ports and in­dus­tri­al out­put both slumped in Ju­ly. The cen­tral bank now ex­pects eco­nom­ic ac­tiv­i­ty in Japan "to lev­el off more or less." BoJ gov­er­nor Masaa­ki Shi­rakawa said the bank had down­grad­ed Japan's eco­nom­ic view and de­cid­ed to ex­pand mon­e­tary eas­ing be­cause "over­seas economies are slow­ing more than we an­tic­i­pat­ed."

BBC