On Tuesday the Bank Of Japan stated it would combat the country’s slowing economy with an additional $138 billion in monetary easing, a move similar to banks in the U.S. and Europe. While the BOJ will keep its rates the same, at zero to 0.1%, its total asset-purchase program now stands at 91 trillion yen (approx. $1.15 trillion).
Japan’s central bank has been under pressure for some time from the government to take action against the slowing of the nation’s disaster recovery. The dire condition of the global economy has been heightened Japan with the strength of the yen against worldwide currencies. This in turn has heavily affected Japan’s exports industry, resulting in little demand overseas for Japanese good, and when they do sell, little to no profits can be made after currency exchanges. The BOJ said in a statement that it felt it was necessary to take further monetary easing action to order to keep Japan on its path towards recovery and stability.
Just last month the BOJ expanded its easing fund by $126 billion, which was then followed with the news that September’s industrial production was lower than expected and trade was at its worst in over 30 years, thanks to the territorial dispute with China. Last week the government approved a stimulus package of $5.3 billion, however Prime Minister Yoshihiko Noda is still struggling to get support from opposition parties to approve a budget funding bill. Without it, there is fear that the government will go broke by December.
[via Channel News Asia]
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