Japan’s central bank relaxes monetary policy, falling stock prices – SPIEGEL ONLINE

In the fight against economic weakness and years of deflation, the Bank of Japan’s more money out. The Bank of Japan (BoJ) announced after two days of discussions to purchase more securities. Because but relates only exchange traded funds (ETF) and not other securities such as government bonds, financial markets reacted disappointedly. So put the yen in the first minutes after the announcement of measures to and from the main Japanese indices extended their losses.

the left its key interest rate central bank at minus 0.1 percent. So she resisted pressure from the government and the markets to do more to get closer to the inflation target of two percent. The BoJ lowered its inflation forecast for the current fiscal year to 0.1 percent after earlier 0.5 percent. However, for the coming tax year, it proceeds of 1.7 percent inflation.

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Specifically, the Fed decided now that purchases of exchange-traded funds (ETFs) on six trillion annually yen (52 billion euros). The monetary base is meanwhile continue without changes to 80 trillion yen a year (688 billion euros). The growth forecast for the current until 31 March 2017 fiscal year lowered the BoJ slightly to 1.0 percent from 1.2 percent.

Fed wants to check their own monetary policy

What was surprising was the announcement from BoJ chief Haruhiko Kuroda an accurate assessment of the monetary policy of the country. If central bankers meet next time in September, the effectiveness of many individual measures to be checked. Together with the government is trying the BoJ for years, to boost the local economy.

At first had the massive flood of money as the central pillar of the “abenomics” actually causes mentioned economic policy of Prime Minister Shinzo Abe a recovery because the yen depreciated sharply and exports anschob. But this will be difficult, the yen has now risen sharply again. The government wants to enact a new stimulus plan next week.

The program had been promised after the election victory of the ruling LDP in the recent Upper House elections. It is, according to Abe have a total volume of more than 28 trillion yen. About the amount of direct expenditure but there is still uncertainty, there was talk recently of seven trillion yen. Against this backdrop, economists had indeed expected that the BoJ loosened monetary policy.