The central bank said it would nearly double its annual purchases of exchange traded funds, to 6 trillion yen ($57 billion) from the current 3.3 trillion yen.
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The central bank in its statement proposed to increase the size of the lending programme that provides dollar funding to Japanese financial institutions and conducts comprehensive assessment of effects of QQE with negative rate policy at next rate review.
The BOJ doubled purchases of exchange-traded funds, but maintained its base money target at 80 trillion yen (S$1 trillion) and the pace of purchases of other assets, including Japanese government bonds.
The Japanese Yen has appreciated in value against major currencies in the aftermath of what the market saw as modest stimulus measures, that were announced by the Bank of Japan (BOJ), where the spending to ease monetary conditions reached 28 trillion Yen.
German bonds followed their Japanese and USA peers lower after the BOJ expanded its purchases of exchange-traded equity funds, while refraining from making a deeper cut to its negative interest rate or boosting the amount of government debt it buys.
It also doubled the size of a USA dollar lending program to support Japanese companies’ operations overseas, to $24 billion. The euro edged up 0.2 percent to $1.1097.
The dollar was half a percent lower against a basket of its peers at 96.289, having hit set a 2-week low at 96.216.
Investors were hoping for a bigger increase in monetary stimulus, pushing the yen higher against move major currencies – a United States dollar was worth 104.5 yen before the announcement, but 102.8 shortly afterwards.
Factory output rose 1.9 percent in June and the jobless rate fell to 3.1 percent, marking the lowest reading in almost 21 years, with job availability at a almost 25-year high, reflecting labour shortages, other data showed.
Before the BOJ’s decision, many investors warned of a big chance of disappointment because markets have long expected more stimulus, making it hard for BOJ Governor Haruhiko Kuroda to spring a surprise.
A man looks at an electronic stock board of a securities firm in Tokyo, Japan, Friday, July 29, 2016. Standard & Poor’s 500 index rose 3.48 points, or 0.2 percent, to 2,170.06 and the Nasdaq composite rose 15.17 points, or 0.3 percent, to 5,154.98.
The dollar last traded at 103.33 yen, down 1.9 percent, having hit a 2-1/2 week low of 102.705 yen after the BOJ’s decision to expand only its purchases of stock market-linked ETF paper.
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Global benchmark Brent crude futures dropped 0.6 per cent to US$42.45. “Increasing ETF purchases makes no contribution to achieving 2pc inflation”. Little new has developed in recent months on the reform front, this so-called third arrow of Abenomics, with the focus dedicated to the fiscal discussions.
