BOJ Takes Additional Easing Action, To Increase Asset Purchases By Y10tln

TOKYO--The Bank of Japan decided to expand its monetary policy Wednesday, following recent easing action by the Federal Reserve, as the central bank looks to tackle entrenched deflation, an export-sapping strong yen and the impact of slowing global growth.

The central bank's policy board decided at the end of a two-day meeting to increase the size of its asset purchase program--the main tool for monetary easing amid near zero interest rates--to 80 trillion yen from Y70 trillion.

The move came after the Fed introduced another round of quantitative easing last week, which put renewed upward pressure on the yen.

The additional purchases will be made on corporate bonds, commercial paper, exchange-traded funds and real estate investment trusts next year.

The BOJ also decided to extend the deadline of the program itself until the end of December 2013.

The BOJ said it would to remove the 0.1% minimum bidding yield for government and corporate bond purchases. It has already terminated the similar yield for buying of treasury discount bills, successfully boosting responses at market operations.

"These measures in pursuit of powerful monetary easing will make financial conditions for such economic entities as firms and households even more accommodative by further encouraging a decline in longer-term market interest rates and a reduction in risk premiums," the central bank said in a statement released together with the rate decision.

Board members voted unanimously to expand the scope of the asset-purchase program. The BOJ also decided to leave its policy rate, or the unsecured overnight call loan rate, unchanged in a 0.0%-0.1% range.

The dollar rose quickly against the yen following the announcement. It increased to Y79.02 from Y78.69.

The market will now focus on Gov. Masaaki Shirakawa's press conference from 0630 GMT for an explanation of the move.

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