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Japan’s central bank follows US lead in easing monetary policy to cushion recovery

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In this Feb. 7, 2011 photo, Bank of Japan Gov. Masaaki Shirakawa speaks during a press conference at the Foreign Correspondents\' Club of Japan in Tokyo. Japan\'s central bank expanded its monetary easing by 10 trillion yen (26 billion) Wednesday, Sept. 19, 2012, moving to nurture the country\'s feeble economic recovery and cushion its exporters from the yen\'s rise against other currencies. (AP Photo/Shizuo Kambayashi)

TOKYO – Japan’s central bank has moved to protect the country’s fragile recovery by extending its monetary easing.

The Bank of Japan wrapped up a two-day policy meeting Wednesday by increasing its asset-purchasing fund to 55 trillion yen ($700 billion) from 45 trillion yen. That the U.S. Federal Reserve’s decision to stimulate growth through so-called quantitative easing.

The bank kept its main short-term interest rate at between zero to 0.1 per cent

Japanese shares surged, with the benchmark Nikkei 225 index hitting its highest level in more than four months. The Japanese yen, meanwhile, weakened to 79.17 yen per dollar by mid-afternoon, from 78.66 yen in the morning.

The Japanese yen had continued to strengthen in recent weeks, prompting Finance Minister Jun Azumi to hint last week that intervention was likely.

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