Japan's central bank shocks markets with more easing as inflation slows
source : http://www.reuters.com/article/2014/10/31/us-japan-economy-boj-idUSKBN0IK0B120141031The Bank of Japan shocked global financial markets on Friday by expanding its massive stimulus spending in a stark admission that economic growth and inflation have not picked up as much as expected after a sales tax hike in April.
[...]
"We salute the BoJ for admitting that they weren't going to reach their goals on inflation or GDP, though we do note that the new policy equates to about $60 billion of quantitative easing per month. This perspective does raise the question of just how much impact monetary policy is having."
[...]
"We decided to expand the quantitative and qualitative easing to ensure the early achievement of our price target," Kuroda told a news conference, reaffirming the BOJ's goal of pushing consumer price inflation to 2 percent next year.
[...]
In a rare split decision, the BOJ's board voted 5-4 to accelerate purchases of Japanese government bonds so that its holdings increase at an annual pace of 80 trillion yen ($723.4 billion), up by 30 trillion yen.
The central bank also said it would triple its purchases of exchange-traded funds (ETFs) and real-estate investment trusts (REITs) and buy longer-dated debt, sending Tokyo shares soaring and prompting a sharp sell-off in the yen.
[...]
In a reminder of the challenges the central bank faces, data earlier on Friday showed annual core consumer inflation was 1 percent when stripping out the effect of April's tax hike, half the BOJ's target.
Household spending fell for a six straight month in September from a year earlier, while the job-availability rate eased from its 22-year high in August.
[...]