"The specific mention of a two-year time horizon was a positive surprise"
- Takuji Okubo, chief economist at Japan Macro Advisors
The Bank of Japan led by the newly-appointed Governor Haruhiko Kuroda, unleashed the world's most intense burst of monetary stimulus on Thursday, pledging to inject about $1.4 trillion into the struggling economy in less than two years, in order to revive growth. The BoJ plans to purchase 7.5 trillion yen ($78.6 billion) of bonds per month and double the monetary base, which includes cash in circulation, in two years, exceeding economists' median estimate of 5.2 trillion yen a month. According to BoJ's projections, the nation's monetary base will grow to 270 trillion yen by the end of 2014. The bank is also planning to increase holdings of exchange-traded funds and real-estate investment trusts by 1 trillion yen and 30 billion yen per year, respectively. With interest rate already close to zero, purchases of government bonds and other assets have been the main tool used by the central bank to help stimulate the economy. Meantime, the BoJ left its benchmark interest rate unchanged.
"It's fast and furious," said Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo, "The specific mention of a two-year time horizon was a positive surprise."
"Today's decision clearly heralds a regime change at the BOJ," Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset & Management.
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