The Bank of Japan decided to carry on with its massive stimulus of the economy and Nikkei [Japan225] started flirting with a 15 year maximum.
Despite the not so great results in Japanese consumer spending as well as factory output, BOJ will continue to increase the cash and deposits at an annual pace of 80 trillion yen ($670 billion) by purchasing government bonds and risky assets as part of its monetary policy. The policy decision of BOJ was made by 8 vs. 1 vote.
Nikkei [Japan 225] is currently at 19,900 and flirting with a 15 year high last seen in March 2000, when the Japanese index traded at 21,067.
Takahide Kiuchi, BOJ board member proposed making 2% inflation target a medium to long-term goal and keep asset purchases and zero interest rates for as long as needed. Kiuchi also proposed changing monetary policy by reducing the monetary base expansion to 45 trillion yen annual pace, instead of 80 trillion yen. However, Kiuchi’s proposal was rejected by a majority vote.
BOJ acknowledged consumer inflation to be balancing around 0% excluding the effect of sales tax increase and is expecting the consumer inflation to stay at this level due to the fall in oil prices.
BOJ also stated its optimistic view on the Japanese economy, that it is recovering moderately and will likely continue recovering moderately as a trend.
The Bank of Japan began stimulus in October 2014 to prevent falling oil prices and slowdown in inflation as a result.
MT4 GRAPH: NIKKEI [Japan225]
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