The Bank of Japan expanded its asset-purchase program for thesecond time in two months, a move that failed to cheer investors asstocks slumped amid mounting evidence that the economy contractedlast quarter.

The fund will increase by 11 trillion yen ($138 billion) to 66trillion yen while a separate credit loan program will stay at 25trillion yen, the bank said in Tokyo, acting hours after datashowed the biggest decline in industrial output since last year'searthquake. The BOJ will also offer unlimited loans to banks toboost credit demand.

The Nikkei 225 Stock Average closed 1 percent lower and the yenstrengthened as faltering exports and waning domestic demandbolster the case for more easing in coming months after the bankforecast it will miss its inflation target in the next two fiscalyears. Economy Minister Seiji Maehara attended his second BOJmeeting today and, in a joint statement with Governor MasaakiShirakawa, said that the government “strongly expects” powerfuleasing until deflation is overcome.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.