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TOKYO - The Bank of Japanboosted its asset-buying scheme by afurther 10 trillion yen ($124 billion) on Friday and pledged to buylonger-term government bondsin a move seen aimed at convincing bothimpatient politicians and investors of its resolve to pull theeconomy out of deflation. The central bankalso kept expectations of more stimulus aliveas it pledged to "pursue powerful monetary easing" to reach its 1percent inflation target, even as it nudged up its growth and priceforecasts for the coming years. The policy easing came at the top of an expected 5-10 trillionyen range and initially impressed markets, pushing the yen lower.The central bank's decision to buy more exchange-traded funds(ETFs) and real-estate linked funds also helped lift Tokyo shares .n225 . But the yen later crept back up and stocks slipped as somemarket players saw the BOJ's decision to give itself more time tohit the bond-buying goal as a sign that central bankers themselveshad doubts about how much good their action would do for thestruggling economy. "The leopard doesn't change its spots. It (the BOJ) doesn'tview monetary accommodation as a cure capable of reversing Japan'sdeflation," said Tim Condon, chief Asia economist at ING inSingapore. "They seem motivated by politics and political pressure inthese last couple of moves ... so I think they will do the minimumthat they feel they are forced to do." The BOJ's second easing in just over two months comes at a timewhen the economy is picking up and was seen mainly as symbolicresponse to politicians' calls for more efforts in battlingdeflation that has dogged Japan for over a decade, depressingconsumption and business investment. As expected, the central bank also extended the duration ofgovernment bonds targeted under its asset-buying scheme to threeyears from the current two years. BUYING BONDS, BUYING TIME BOJ Governor Masaaki Shirakawa said Friday's decision was aimedat supporting the "positive momentum" building up in the economythat he believes will help Japan achieve the central bank'sinflation target as early as in 2014. He offered few clues on the outlook for monetary policy butsignaled his hope of spending some time before acting again, sayingthat the BOJ would "carefully and calmly" assess the effect of itsrecent steps in guiding policy. "We'd like to achieve 1 percent inflation in Japanas soon aspossible. But it takes quite a long time for the effect of monetaryeasing to appear on the economy," Shirakawa told a news conferenceafter the policy meeting. "Recklessly easing without taking into account that lag effectwould destabilize price moves," he said. The political reaction to Friday's decision, however, shows theBOJ may have only bought itself a little bit of time. Finance Minister Jun Azumi described the move as "another boldeasing step", but said he hoped the central bank would continue totake such steps. The BOJ revised up its economic and price forecasts in asemi-annual outlook report released on Friday, projecting consumerprices would rise 0.7 percent in the fiscal year 2013/14, withinflation reaching 1 percent some time thereafter. But data released earlier on Friday showed consumer inflationrose just 0.2 percent in March from a year earlier, a sign Japanstill had a long way to go to beat deflation. HALF-HEARTED MOVE? Some analysts also questioned the scale of Friday's move,saying the BOJ actually has not committed to expand its balancesheet or accelerate the pace of asset purchases that much. While boosting the pool for asset purchases, the central bankcut by 5 trillion yen the scope of its fixed-rate market lendingoperations, citing faltering demand. As a result, it increased the combined asset-buying and loanprogram by just 5 trillion yen to 70 trillion yen. It also extended the duration of the purchasing program by sixmonths to June 2013, a sign that the pace of government bondpurchases will not change that much. "I find these moves disappointing. Yes, the BOJ will own moreJGBs by mid 2013. Indeed they will own more JGBs by end of 2012.However, the total size of the asset purchase program has notincreased by the end of this year," said Westpac chief currencystrategist Robert Rennie in Sydney. "This is the disappointing part for me." ($1 = 80.7900 Japanese yen) (Additional reporting by Tetsushi Kajimoto and Kaori Kaneko;Writing by Leika Kihara and Tomasz Janowski; Editing by KimCoghill). The e-commerce company in China offers quality products such as China 8051 Processor , Megawin Microcontroller Manufacturer, and more. For more , please visit 8051 Processor today!
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