News is just crossing the wires that the Bank of Japan is considering open-ended asset buying, according to sources in a Reuters report.The Reuters report cites “sources familiar with the BoJ’s thinking.”
Below are details from the report:
Instead of topping up the asset-buying and lending programme again, the BOJ may pledge to buy assets open-endedly until 2 per cent inflation is in sight, without setting a specific date for completing the purchases, the sources said.
Another idea being floated is for the central bank to pledge that it will keep the balance of its asset-buying and lending programme intact even beyond its end-2013 deadline, they said.
The BOJ will also consider scrapping the 0.1 per cent interest it pays on excess reserves that financial institutions park at the central bank, according to the sources, who spoke on condition of anonymity due to the sensitivity of the matter. That rate has effectively served as a floor to money market rates and kept them from falling to zero.
The central bank is under pressure from newly-elected Prime Minister Shinzo Abe, who has been forcefully talking down the yen in recent weeks and months in a bid to induce inflation.
The news from Reuters comes shortly after Nikkei reported that the Bank of Japan was preparing to ease policy at its next meeting on Tuesday.
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