Bank Of Japan In Boldest Attempt Yet To Revive Economy

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The Bank of Japan announced on Tuesday its most determined effort yet to end years of economic stagnation, saying it would switch to an open-ended commitment to buying assets next year and double its inflation target to 2 percent, Reuters reported. It issued a joint statement with the government promising to reach the inflation goal "at the earliest possible time," drawing praise from Prime Minister Shinzo Abe, who has piled relentless pressure on the central bank to take bolder measures to pull Japan out of deflation. The decision to adopt asset buying with no end date had exceeded market expectations, analysts said. But Tokyo stocks fell and, after an initial selloff, the yen rose on investor disappointment that the expanded stimulus would not start until 2014. "They've gone further than I thought by introducing the open-ended plan," said Joseph Capurso, currency strategist at Commonwealth Bank of Australia in Sydney. "What surprises me is they won't start until 2014. That's very odd and different from what the Federal Reserve did, which was immediate," he said. Having slashed interest rates close to zero, the BOJ's policy is the latest unorthodox effort by a leading central bank to try to boost an otherwise weak recovery from the global financial crisis and, in Japan's case, overcome more than a decade of deflation. Read more. (Subscription required.)