The Bank of Japan unexpectedly expanded its asset-purchase fundby 10 trillion yen ($126 billion), seeking to counter an increasingdanger of contraction in the world's third-largest economy.

The BOJ's program, in which it buys mainly government debt, orJGBs, was enlarged to 55 trillion yen, the bank said in a statementin Tokyo. Governor Masaaki Shirakawa said the bank also willabandon minimum yields for 1.8 trillion yen in monthlygovernment-bond purchases conducted separately from the stimulusfund, opening the door to the potential for negative rates.

Japanese stocks jumped and the yen fell after the decision toease policy, which was forecast by only five of 21 analystssurveyed by Bloomberg News. With today's move, the BOJ joinscounterparts from the Federal Reserve to the European Central Bankin acting against persistent risks to growth, five years after theU.S. mortgage meltdown derailed the global economy.