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

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.