London - Arabstoday
The Bank of Japan (BOJ) has expanded its asset purchase programme by 5tn yen ($66bn; £41bn) in a bid to boost growth. The move comes amid concerns that the European debt crisis coupled with a strong yen may hurt Japan\'s post-quake recovery. The BOJ also left rates unchanged at between zero and 0.1%. The central bank said it will use the extra funds to purchase Japanese government bonds. Analysts said the bank\'s decision was an attempt to restore faith in the economy. \"Basically it is a message to international sovereign markets unsettled by the European debt crisis, that the BOJ is willing to bailout the Japanese bond market if it is necessary,\" Martin Schulz of the Fujitsu Research Institute told the BBC. \"The volume however is negligible, so this move is more of a message than a policy act,\" he added. Effective currency tool? The central bank\'s decision comes at a time when the Japanese currency has been reaching record levels against the US dollar. Uncertainty in the global markets driven by the European debt crisis and fears of a slowdown in the US has encouraged investors to buy the Japanese currency as a safe-haven asset. It was trading at 75.94 yen against the US dollar in Asian trade. However, analysts said that the central bank\'s decision is unlikely to help weaken the yen as investors are likely to stick to less risky assets for now. \"The BOJ did show that it won\'t let the yen\'s appreciation go unchecked, but any weakening of the currency is likely to be temporary as the latest step simply will not be able to change the global trend towards risk aversion,\" said Katsutoshi Inadome of Mitsubishi UFJ Morgan Stanley Securities. Satoru Ogasawara of Credit Suisse added: \"the yen\'s moves are influenced by Europe\'s situation. If things improve, that would weaken upward pressure on the yen, but Europe hasn\'t made a final decision\".