by Calculated Risk on 10/05/2010 09:02:00 AM
Tuesday, October 05, 2010
Bank of Japan eases monetary policy
From the WSJ: Bank of Japan Cuts Key Rate
The Bank of Japan [announced] a 35 trillion yen ($418 billion) monetary easing program ... while cutting interest rates to virtually zero. It also launched a 5 trillion yen program to buy private- and public-sector assets.The Japan central bank will be buying corporate debt in addition to government debt.
... the BOJ said the new program was designed to "encourage the decline in longer-term interest rates and various risk premiums to further enhance monetary easing."
The central bank acknowledged its move was "an extraordinary measure for a central bank." Bank of Japan Gov. Masaaki Shirakawa said Tuesday that the central bank's [decision] was based on a worse-than-expected outlook for the domestic economy.