The Bank of Japan embarked on a new policy phase Wednesday, adopting the country’s 10-year interest rate as a new target instead of boosting its already massive asset purchases, in an attempt to achieve its 2 percent inflation goal as soon as possible.
After its two-day Policy Board meeting, the central bank said it had decided by a 7-2 majority vote to modify the framework of its bond-buying program to keep the yield of the bellwether 10-year Japanese government debt around zero percent.
To push down shorter-term interest rates, the BOJ left its negative policy rate unchanged at minus 0.1 percent, while promising to continue expanding the monetary base until consumer prices exceed 2 percent in a stable manner.
“The BOJ will take additional easing measures without hesitation if necessary,” Governor Haruhiko Kuroda said at a press conference after the meeting, adding the bank may extend its negative interest rate and cut the target level of a long-term interest rate to make financial conditions more accommodative.
