Bank of Japan increases asset purchase programme

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