BOJ doubles inflation target, adopts open-ended asset buying

TOKYO Mon Jan 21, 2013 11:08pm EST

TOKYO Jan 22 (Reuters) - The Bank of Japan on Tuesday doubled its inflation target to 2 percent and adopted an open-ended commitment to buy assets, surprising markets that had expected another incremental increase in its 101 trillion yen ($1.12 trillion) asset-buying and lending programme.

The BOJ also issued a joint statement with the government in which it set 2 percent inflation as its new target, although two of the central bank's nine board members dissented against this decision.

As widely expected, the BOJ maintained its overnight call rate target at a range of zero to 0.1 percent by a unanimous vote.

BOJ Governor Masaaki Shirakawa will hold an embargoed news conference with his comments expected to come out some time after 4:15 p.m. (0715 GMT).

The BOJ set a 1 percent inflation target in February last year, and expanded monetary stimulus five times in 2012 through an increase in its asset-buying and lending programme.

Prime Minister Shinzo Abe, however, has piled pressure on the central bank to aim for 2 percent inflation as a medium-term target and pledge to ease policy aggressively to achieve it.

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