Investing.com - The Bank of Japan unexpectedly added JPY10 trillion to its asset-purchase program and set an inflation target, while keeping its benchmark interest rate unchanged, it announced on Tuesday.
In a statement, the BoJ said it was keeping its benchmark interest rate unchanged between a range of 0.0% to 0.1%, broadly in line with expectations.
A statement on monetary policy released after the announcement showed that the Bank of Japan’s nine-man policy board voted unanimously to maintain the interest rate at its current level.
The central bank said it will increase the size of its “powerful monetary easing” to JPY65 trillion from JPY55 trillion, with the net JPY10 trillion increase earmarked for the purchase of Japanese government bonds.
In addition, the BoJ set a 1% inflation target “for the time being” and stated that positive consumer-price growth would be defined as below 2% year-on-year.
In a statement accompanying the policy decision, the Bank of Japan said that the actions come amid flat economic activity and high uncertainty over the outlook for Europe, the supply of electricity to Japanese industry in wake nuclear-generated supply disruptions, and the impact of the stronger yen.
The statement added that, the central bank aimed to “clarify its monetary policy stance and to further enhance monetary easing” to “overcome deflation and achieve sustainable growth with price stability.”
Following the decision, the yen was lower against the U.S. dollar, with USD/JPY adding 0.51% to trade at 77.97.
Meanwhile, Asian stock markets were mixed. Japan’s Nikkei 225 Index rose 0.6%, Australia’s ASX/200 Index dropped 1%, while Hong Kong's Hang Seng Index slipped 0.15%.
In a statement, the BoJ said it was keeping its benchmark interest rate unchanged between a range of 0.0% to 0.1%, broadly in line with expectations.
A statement on monetary policy released after the announcement showed that the Bank of Japan’s nine-man policy board voted unanimously to maintain the interest rate at its current level.
The central bank said it will increase the size of its “powerful monetary easing” to JPY65 trillion from JPY55 trillion, with the net JPY10 trillion increase earmarked for the purchase of Japanese government bonds.
In addition, the BoJ set a 1% inflation target “for the time being” and stated that positive consumer-price growth would be defined as below 2% year-on-year.
In a statement accompanying the policy decision, the Bank of Japan said that the actions come amid flat economic activity and high uncertainty over the outlook for Europe, the supply of electricity to Japanese industry in wake nuclear-generated supply disruptions, and the impact of the stronger yen.
The statement added that, the central bank aimed to “clarify its monetary policy stance and to further enhance monetary easing” to “overcome deflation and achieve sustainable growth with price stability.”
Following the decision, the yen was lower against the U.S. dollar, with USD/JPY adding 0.51% to trade at 77.97.
Meanwhile, Asian stock markets were mixed. Japan’s Nikkei 225 Index rose 0.6%, Australia’s ASX/200 Index dropped 1%, while Hong Kong's Hang Seng Index slipped 0.15%.