After the US Fed closed the purse strings on Quantitative Easing, the Bank of Japan surprises everyone with a decision of the opposite sign. During the Italian night, the Japanese central bank communicated the decision to adopt new monetary easing policy measures.
In particular, the BoJ will increase the monetary base by another 10 trillion-20 trillion yen a year, to around 80 trillion yen (equal to 583 billion euros) from the previous 60-70 trillion (430-500 billion euros).
The central bank will also increase the scope of its asset-purchase programme, tripling the purchase of exanched-traded funds (ETFs), REITs (real estate investment trusts) and long-dated debt.
The move was decided to fight deflation more effectively, once it was acknowledged that the previous measures launched by Prime Minister Shinzo Abe had exhausted their effects.
In fact, Japan is still very far from the 2% inflation target forecast for 2015. In September, the figure adjusted net of the increase in the consumption tax marks +1%, against +1,1 .XNUMX% in August.
"We have decided to expand quantitative easing to ensure rapid achievement of the objectives," Governor Haruhiko Kuroda said at a press conference, reaffirming the 2% inflation target for next year. “We are at a critical stage in trying to get out of the deflationary mentality,” he concluded.
