The Bank of Japan on Wednesday embarked on a powerful monetary easing by expanding the total size of the asset purchase program by about JPY 10 trillion and extending the asset purchase deadline by six months.
The total size of the program was lifted to JPY 80 trillion, which corresponds to additional purchases of Japanese government bonds and treasury discount bills by JPY 5 trillion each. The asset purchase target now stands at JPY 55 trillion, up from JPY 45 trillion.
In addition, the central bank extended the intended timescale for completing the asset purchases till end-December 2013 compared to previous deadline of end-June 2013. The credit facility was unchanged at JPY 25 trillion.
At the same time, the bank decided to remove the minimum bidding yield, which is currently 0.1 percent per annum, for the outright purchases of JGBs and corporate bonds in order to ensure smooth purchase.
As expected, the benchmark uncollateralized overnight call rate has been kept unchanged at 0-0.1 percent by a unanimous vote.
Meanwhile, BoJ downgraded its assessment of the economy, saying that "the pick-up in economic activity has come to pause" reflecting developments in overseas economies.
by RTT Staff Writer
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