The Bank of Japan affirmed a plan to double the monetary base over two years after a jump in bond yields highlighted risks associated with Prime Minister Shinzo Abe’s campaign to revive the economy.
The central bank will expand the supply of money in the economy by 60 to 70 trillion yen ($683 billion) a year, as pledged in April, the BOJ said in Tokyo today. Twenty-six of 27 economists in a Bloomberg News survey forecast no change in monetary policy.
The biggest surge in government debt yields in five years threatens to undermine the BOJ’s stimulus efforts, with companies including steelmaker JFE Holdings Inc. pulling bond sales amid the volatility. Aided by a sliding yen and gains in the stock market, Abe is trying to sustain economic momentum to boost wages and prices and pull the nation out of a 15-year deflationary malaise.
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