The Bank of Japanhas taken the rare step of easing monetary policy for a second month in a row to arrest flagging growth, while making a direct appeal to the government for help to overcome the country’s persistent state of deflation.
Before the scheduled policy decision, expectations had been building that the BoJ would downgrade its official forecasts for consumer price rises, which have consistently fallen well short of the 1 per cent target the bank adopted in February. As Japan’s growth has faltered since then, politicians have been applying more pressure on the BoJ to take bolder measures to revive the economy.
On Tuesday the central bank responded by expanding its asset-purchase programme (APP) by about Y11tn ($138bn) to Y91tn, by adding Y10tn of government debt and most of the remainder in exchange traded funds, corporate bonds and commercial paper.