Thursday saw policy makers with the Bank of Japan vote to purchase additional bonds as a means of watering down the Pacific Rim nation's monetary unit, published reports indicate.
Calls to intervene with the yen's strength have grown louder recently while government officials also have dropped hints about imminent action to rein in the monetary unit of the globe's third-biggest economy. The yen has increased to record highs against rival currencies even as the nation continues recovering from the March 11 earthquake and subsequent tsunami that caused large damage to the export reliant economy.
But despite the intervention, some skeptics remained about the purchase of bonds as the correct method.
"Bringing down long-term interest rates is effective in weakening the yen," chief economist Hideo Kumano with Dai-Ichi Life Research Institute told Reuters. "The BOJ decided to focus on increasing JGB purchases this time, but why didn't they decide to buy JGBs with maturities exceeding two years?"
Thursday's vote will result in Japan buying 5 trillion yen-worth of bonds, which is roughly equal to $65.7 billion, according to The Wall Street Journal. The end result will see the yen abundantly appear in the market.
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