Following the prime minister call for bolder action against deflation, the Bank of Japan decided to engage in more aggressive monetary easing by expanding asset-buying and lending program to $1.2 trillion, and hinted at a review of its current 1 percent inflation target. The bank also decided to keep its benchmark interest rate steady at a range of zero to 0.1 percent.
Extract from the Statement on Monetary Policy:
The Bank recognizes that Japan's economy faces the critical challenge of overcoming deflation as early as possible and returning to the sustainable growth path with price stability. This challenge will be met through the combination of efforts by a wide range of economic agents to strengthen the economy's growth potential and support from the financial side. Based on this recognition, while the Bank will provide support for financial institutions' efforts to strengthen the foundations for economic growth and to increase their lending, it will pursue aggressive monetary easing in a continuous manner by conducting its virtually zero interest rate policy as well as steadily increasing the amount outstanding of the Asset Purchase Program. The Bank continues to conduct monetary policy in an appropriate manner. 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.