NEW MONETARY POLICY IN JAPAN

JAPAN HERALDS 'EPOCH-MAKING' MONETARY MOVES

Bank of Japan's move is the latest effort by a leading central bank to support a weak recovery from the global financial crisis

Reuters

The Guardian, January 22, 2013

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 double its inflation target to 2%.

It promised to reach the inflation goal "at the earliest possible time."

The steps represent the latest unorthodox effort by a leading central bank to support a weak recovery from the global financial crisis, although in Japan's case the country is also trying to overcome nearly two decades of low-grade deflation.

The BOJ's break from an earlier policy of topping up a lending and asset buying programme launched in October 2010 follows weeks of relentless pressure from new prime minister Shinzo Abe for a greater push to lift an 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% in only a handful of months since the late 1990s.

(...) [article here]