The Bank of Japan had its first interest rate meeting with Haruhiko Kuroda, the dovish banker hand-picked by new prime minister Shinzo Abe to push easy monetary policy.
The incredible hype surrounding Kuroda and Abe’s “Abenomics” have caused the Nikkei to surge and the yen to plunge for months.
This had many market watchers worried that Kuroda was doomed to disappoint.
They were wrong.
In what RBS described as the “perfect answer,” Kuroda surprised everyone with a massive monetary easing plan.
It will embark on an open-ended asset purchase plan and buy around 7 trillion yen ($75 billion) of long-term government bonds per month.
“The BOJ will conduct money-market operations so that the monetary base will increase at an annual pace of about 60 trillion yen to 70 trillion yen,” the BOJ said.
The markets were impressed. You can see their verdict in the Nikkei, which surged, and the yen, which tanked.
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