The Bank of Japan doubled its inflation target to 2 percent and made an open-ended commitment to buy assets from next year, surprising markets that had expected another incremental increase in its $1.1 trillion asset-buying and lending programme.
But central bankers were divided on the new price target with two in the nine-member board voting against setting it at 2 percent, underscoring the dilemma the BOJ faces as it struggles to beat deflation with its depleted policy arsenal.
The BOJ has been under relentless pressure from new Prime Minister Shinzo Abe for bolder action to overcome deflation and lift the economy out of recession.
Until Tuesday, the central bank had pledged to pump 101 trillion yen ($1.1 trillion) into markets with its asset-buying and lending programme by the end of this year, but had made no commitment on whether to maintain the balance beyond 2014.
At the two-day meeting that ended on Tuesday, it decided that from 2014 it would switch to an open-ended approach of buying a certain amount of assets each month without setting a deadline for completing the purchases.
From 2014, the BOJ will buy 13 trillion yen in assets each month, including 2 trillion yen in long-term government bonds and 10 trillion yen in treasury discount bills, the central bank said in a statement.Page 1 of 3 | Next Page