By Simon Miller
The Bank of Japan (BoJ) has become the latest central bank to fire up the printing presses again in a bid to stimulate the economy.
The bank announced it was increasing the size of its asset purchase programme by ¥10trn (£80trn) from ¥70trn to ¥80trn and follows similar announcements from the Federal Reserve and the European Central Bank.
The increase corresponds with the size of additional purchases of treasury discount bills (T-Bills) by about ¥5trn and Japanese government bonds (JGBs) by about ¥5trn.
The increased purchases under the programme will be completed by around end-2013. with additional purchases of T-Bills and JGBs being completed by around
end-June 2013 and around end-2013, respectively.
Through these measures, the amount outstanding of the Program will be about ¥65trn by around end-2012, about ¥75trn by around end-June 2013, and about ¥80trn by around end-2013.
In addition, the bank has removed the minimum bidding yield - currently 0.1% per annum for the outright purchase of JGBs and corporate bonds and the BoJ said it would "encourage" the uncollateralised overnight call rate to remain at around
0 to 0.1 percent.
Bank of Japan said that economic conditions made it "appropriate to expand the total size of the programme" and added: "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."
It continued: "The Bank expects that, together with the cumulative effects of earlier policy measures, today's decision to enhance monetary easing will ensure the return of Japan's economy to a sustainable growth path with price stability."
Speaking at a press conference, BoJ governor Masaaki Shirakawa said that a prolonged slowdown in global growth meant Japan could see a six-month delay in its recovery.
He added: "We judged that further monetary easing was necessary now to ensure that Japan's economy does not slip from a path towards sustained growth with price stability."