Bank of Japan pledges unlimited easing, commits to price goal
- If Land Bill has anything against farmers, I'm ready to change it, says PM Modi
- Essar Leaks: ‘Guests are very important people... Kindly see they are comfortable’
- Mufti to head 25-member cabinet; PM to attend his swearing-in on Sunday
- Economic Survey pegs India's growth at over 8 percent, says inflation easing
- Rail budget missed the opportunity to lay out an agenda for the future, writes Nitish
The Bank of Japan announced on Tuesday its most determined effort yet to end years of economic stagnation, saying it would switch to an open-ended commitment to buying assets next year and doubling its inflation target to 2 percent.
It promised to reach the inflation goal "at the earliest possible time.
"The steps mark a break with an earlier policy of topping up a lending and asset buying programme launched in October 2010 and follow weeks of relentless pressure from new Prime Minister Shinzo Abe for a greater push to beat deflation and lift the economy out of recession.
In a joint statement with the government, it affirmed a well-flagged move to commit to the inflation target. Consumer price inflation has reached 2 percent in only a handful of months since the late 1990s.
But aware that markets had already factored in the new price goal and more asset buying and that merely meeting those expectations could trigger a negative reaction, central bankers took steps that several analysts thought would only come later.
"This is very good news. For once, the BOJ has been more aggressive than the market expected," said Brian Redican, senior economist at Macquarie in Sydney. "The government is clearly forcing the pace of change, which is no bad thing.
"The central bank said that from 2014 it would switch to an open-ended approach of buying a certain amount of assets -- 13 trillion yen ($144.77 billion)-- each month without setting a deadline for completing the purchases.
The yen, which inched up ahead of the policy announcements, fell immediately after the decision, though later crept up higher.
Several analysts pointed out, however, the BOJ could have done even more and there will be expectations that it will follow through with further steps mooted by politicians, economists and some central bank policymakers.