The BoJ carried out a second consecutive monetary easing at its Monetary Policy Meeting yesterday in a highly unusual move. As the markets had already discounted a ¥10trn expansion in the Asset Purchase Program (APP), the bank attempted a number of surprises for investors. First, it increased the program by around ¥11trn (JGBs ¥5trn, TBs ¥5trn, ETF ¥500bn, corporate bonds ¥300bn, CP ¥100bn, REIT ¥10bn). It also established a bank lending facility that will provide unlimited loans at low rates. Furthermore, it released an unprecedented joint statement with the government promising to “work together and make their utmost efforts” to overcome deflation.
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