The Bank Of Japan Unexpectedly Cut Its Key Interest Rate &Nbsp; Fully Liberalized Monetary Policy.

　　 Bank of Japan On Tuesday, the accident decided to remove the money overnight. Interest rate reduction To 0.0%-0.1%, and promised to maintain zero interest rates until prices stabilize. At the same time, the central bank will also create funds to purchase Japanese bonds and other assets, aiming at lowering long-term market interest rates and reducing risk premiums.

After the 2 day policy meeting ended on Tuesday (October 5th), the central bank's policy committee agreed to decide on the target of lowering interest rates. The central bank said that the time for Japan to achieve sustainable economic growth under price stability is likely to be postponed. The central bank will carefully study the economic and price situation and take appropriate policy measures.

The Bank of Japan has also decided to set up a temporary fund of about 35 trillion yen to purchase long-term financial assets such as Japanese government bonds, commercial bills, asset backed commercial securities and corporate bonds. Consider buying a 3 trillion and 500 billion yen long Japanese government bond and US Treasury bonds in the first year of the new pool, while buying about 1 trillion yen commercial paper, asset-backed commercial paper and corporate bonds.

At the same time, the purchase under the new pool will be a temporary measure independent of the current long-term bond purchase plan. The Bank of Japan's cap on buying bonds will not apply to bond purchases under the new pool.

In addition, the Bank of Japan has also lowered its economic assessment. The central bank said that Japan's economic recovery was mild, but the momentum of improvement was weakening. Japan's economy is likely to show a moderate recovery trend. Economic growth is less than the possibility of the central bank's prediction in July. It is said that it will carefully study the economic and price situation and adopt appropriate policy measures to pay attention to the impact of economic performance on prices.

Nishioka Junko, chief economic analyst at Royal Bank of Scotland, said the Bank of Japan has adopted a clear monetary easing stance, and most of the credit easing measures adopted by the central bank are implemented in this resolution. The decisions of the central bank reflect a strong desire to fight the economic slowdown and will have an important impact on the market. She said that the market expected the Japanese economy to slow down in the fourth quarter, and the FED also expected to take quantitative easing measures in the near future, so the Bank of Japan needed something urgent.

Hiroshi Watanabe, a senior economist at Da he general research group, said that although the actual impact of the rate cut is uncertain, it is sure to convey strong information that the central bank is willing to cooperate with the government in economic policy. The new asset purchase plan also shows that the central bank is more aggressive and relaxed. In addition, the new measures of the central bank can prevent Japan from lagging behind the US in easing monetary policy, helping to ease the pressure of further appreciation of the yen. But these measures will not prompt the yen to weaken rapidly.

After the announcement of the decision of the Bank of Japan, the US dollar / yen rose rapidly, rising by 0.7% to 83.90 yen during the day. Tokyo's stock market rose strongly after midday, and the Nikkei stock index rose 137.70 points at the close, closing at 9518.76 points, or 1.47%.