"It's likely that the yen will depreciate further given the BOJ's unprecedented easing"
- Yuichi Kodama, Tokyo- based chief economist at Meiji Yasuda Life Insurance Co.
The Bank of Japan, led by the newly-appointed Governor Haruhiko Kuroda, on Monday started its massive stimulus programme by buying 1.2 trillion yen worth of long-term government bonds in order to revive growth in the world's third largest economy. 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 Japanese Yen has dropped to its lowest level since 2008 against the U.S Dollar soon after the BoJ started the world's most intense burst of monetary stimulus. The Yen is expected to depreciate even further and may break through the 100 mark against the dollar as early as this week.
"It's likely that the yen will depreciate further given the BOJ's unprecedented easing," said Yuichi Kodama, Tokyo- based chief economist at Meiji Yasuda Life Insurance Co. "If the yen weakens too much, that could turn out to be problematic."
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