Japanese Traders Cheer Central Bank Policy Tweeks

TOKYO,(UrduPoint / Pakistan Point News -21st Sept,2016) - Tokyo shares shot up and the Yen sank after the Bank of Japan tweaked its policy measures Wednesday, as it ramped up its attempts to kickstart inflation.

The benchmark Nikkei 225 index jumped 1.37 percent as investors embraced the central bank's moves to defeat deflation. The Dollar jumped to 102.64 yen from around 101.66 yen earlier Wednesday. After a two-day meeting, BoJ policymakers set a target to raise government bond yields as part of their drive to kickstart inflation.

They also loosened a fixed target for the massive 80 trillion yen ($785 billion) annual asset-buying plan, saying it could instead fluctuate to give it flexibility in controlling bond yields. The bank pledged to keep up monetary easing as needed to hit a 2.

0 percent inflation target -- prices are nowhere near that level more than three years after the ambitious goal was set.

"The fact that it pledged to keep the current policy until it achieves 2.0 percent inflation target can be interpreted as expansion of its easing policy," said Yasuhide Yajima, chief economist at NLI Research Institute.

Banks stocks were among the big gainers as the bank held off pushing interest rates further into negative territory. Negative rates are meant to encourage lending to people and businesses by effectively charging banks to keep excess reserves in the BoJ's vaults. But commercial lenders have complained they are eating into their financial results.