Members of the Bank of Japan's monetary policy board said that economic conditions in the country warranted the increase of the central bank's asset purchase plan, minutes from the board's September 18-19 policy meeting revealed on Thursday.
At the meeting, the BoJ announced a fresh round of stimulus to revive the economy by unanimously voting to expand the asset purchase by another JPY 10 trillion. The total size of the program was lifted to JPY 80 trillion following an additional JPY 5 trillion purchase authorization each for Japanese government bonds and treasury discount bills.
"Based on these economic and price developments, the Bank of Japan judged it appropriate to expand the total size of the program substantially by about 10 trillion yen and take the aforementioned measure to ensure the steady implementation of asset purchases," the minutes said.
In addition, the central bank extended the intended timescale for completing the asset purchases till the end of December 2013 compared to its previous deadline of end of June 2013. Additional purchases of T-Bills, however, will be completed by end-June 2013.
Through these measures, the amount outstanding of the Program will be about JPY 65 trillion by around the end of 2012, about JPY 75 trillion by around the end of June 2013, and about JPY 80 trillion by around the end of 2013.
At the same time, the bank decided to remove the minimum bidding yield, currently at 0.1 percent per annum, for the outright purchases of JGBs and corporate bonds in order to ensure smooth purchase.
"These measures in pursuit of powerful monetary easing will make financial conditions for such economic entities as firms and households even more accommodative by further encouraging a decline in longer-term market interest rates and a reduction in risk premiums," the minutes said.
As expected, the benchmark uncollateralized overnight call rate was kept unchanged at 0-0.1 percent by a unanimous vote.
The central bank also cut its assessment of the economy, saying the recovery is "pausing."
In addition, the board members noted that price trends may be weakening and inflation is expected to rise slowly.
"The bank recognizes that Japan's economy faces the critical challenge of overcoming deflation and returning to a sustainable growth path with price stability," the minutes said. "This challenge will be met through efforts by a wide range of economic agents to strengthen the economy's growth potential and support from the financial side."
The policy board noted that overseas economies have moved somewhat deeper into a deceleration phase.
The members added that there remains a high degree of uncertainty about the global economy, particularly the prospects for a resolution of the European debt problem and a recovery for the U.S. economy.
The members noted that the situation requires careful monitoring, and that they would take whatever steps were necessary.
"The bank continues to conduct monetary policy in an appropriate manner," the minutes said. "The bank will also do its utmost to ensure the stability of Japan's financial system, while giving particular attention to developments in global financial markets."
Also on Thursday, the central bank said that overall bank lending in Japan was up 1.2 percent on year in September, standing at 397.726 trillion yen. That follows the 1.1 percent increase in August. Including trusts, bank lending was up 1.0 percent on year to 459.647 trillion yen. That follows the downwardly revised 0.8 percent increase in the previous month - which was originally called higher by 0.9 percent.
Lending from foreign banks plunged an annual 15.7 percent to 2.142 trillion yen after plummeting 21.6 percent a month earlier.
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Forex News
April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.