Japan returns to zero rates

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The Independent Online

The Bank of Japan pledged to pump ¥5 trillion (£38bn) into the struggling economy and returned to a zero interest-rate policy yesterday, surprising markets with a fresh dose of economic stimulus.

For months, the central bank had eschewed government calls for more decisive action, such as buying more government bonds, focusing instead on a limited funding scheme.

But in the face of growing evidence that the yen's strength was hurting the economy, the BoJ carried out what it described as "comprehensive monetary easing". It cut its overnight rate target to a range between zero and0.1 per cent and pledged to buy ¥5trn of assets.