Bank of Japan agrees inflation target and monetary easing

 
City A.M. Reporter
The Bank of Japan (BOJ) has agreed to double its inflation target to two per cent and introduce open-ended monetary policy easing in its most determined effort yet to end years of economic stagnation.

The central bank said that from next year it would switch to an open-ended approach of buying assets – 13 trillion yen (£91.3bn) – each month, without a set deadline.

It also promised to reach its inflation target “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.