The Bank of Japan has delivered its third dose of monetary stimulus in four months in a prelude to more aggressive action next year, as it faces intensifying pressure from the country’s next leader for stronger efforts to beat deflation.
Shinzo Abe, whose opposition Liberal Democratic Party (LDP) won Sunday’s election by a landslide, has put the central bank’s independence on the line by repeatedly calling for a binding 2 per cent inflation target, double its current price goal.
The BoJ expanded its asset-buying and lending programme by 10 trillion yen ($112 billion) to 101 trillion yen, a widely expected move to ease monetary policy in response to the intense political pressure.
It also signalled a review of its current 1 per cent inflation target at its next policy-setting meeting in January, when Abe will have a new cabinet in place ready to negotiate with the central bank.
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