Japan’s incoming Prime Minister Shinzo Abe is slated to take office next week, but the country’s central bank, which concluded its two-day policy meeting on Thursday, already appears to be dancing to the leader’s dovish tune, analysts told CNBC.
The Bank of Japan (BOJ) increased its asset purchase and lending program by 10 trillion yen ($119 billion) to 101 trillion yen, expanding stimulus for the third time in the past four months, and also outlined plans to review its one percent inflation target at its next meeting on January 22.
As expected, the BOJ kept its overnight call rate target at a range of zero to 0.1 percent.
“The Bank of Japan can justify the move by pointing to the Tankan report (showing worsening business sentiment) but if there was no pressure from the politicians, it might not have moved today (Thursday). The BOJ is reacting to the pressure,” Masafumi Yamamoto, chief forex strategist, Japan at Barclays told CNBC.
Abe’s Liberal Democratic Party (LDP), which won Sunday’s parliamentary elections in a landslide victory, securing a large majority in the lower house, has been a big proponent of aggressive monetary easing.
Read More at cnbc.com . By Ansuya Harjani.