Tokyo, Dec 18 (IANS) The Bank of Japan (BOJ) on Friday announced it would expand the size of its asset purchasing programme while maintaining the same size of the monetary base, in a bid to drive wages higher and boost business spending.
The bank said a new programme will be established to increase its annual purchases of exchange-traded funds (ETFs) by 300 billion yen ($2.46 billion), to augment the current programme which is set at around 3 trillion yen, Xinhua news agency reported.
The bank also said the average maturity of its Japanese government bond holdings would be extended from seven to twelve years, from the previous seven to ten years, in a move that will help lower long-term interest rates and free up funds for businesses to invest.
The unexpected new round of stimulus by the central bank came immediately after the US Federal Reserve said it would raise its interest rate for the first time in almost a decade.
BOJ Governor Haruhiko Kuroda said the bank’s latest moves were aimed at boosting the momentum of its methods to underpin the economy, hit its inflation target and augment spending across businesses and private sectors.
The BOJ chief also noted that it was important for companies to pass on their profits to their employees, with the bank saying its focus was strongly on spring wage negotiations.