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Bank of Japan increases asset purchase programme

The Bank of Japan (BoJ) has extended its asset purchasing programme by 10

trillion yen ($126bn; 78bn), following similar moves by the Federal Reserve

and the European Central Bank.

The move, aimed at boosting the economy, increases the overall size of the

stimulus programme to 80tn yen.

Though the increase had been anticipated by some analysts, many were surprised

by the size of it.

Finance Minister Jun Azumi said the BoJ "took more action than we anticipated".

Under the asset purchasing programme the central bank buys bonds in order to

keep the long-term cost of borrowing down.

The BoJ also left interest rates unchanged at between zero and 0.1%.

The market responded positively to the news, with the Nikkei 225 index rising

to a four-month high, while the yen fell against both the dollar and the euro.

The yen has strengthened in recent weeks, hurting Japan's export-led economy.

"This is a positive for the economy in the sense that it prevents the yen from

rising," said Hiroaku Muto, senior economist at Sumitomo Mitsui Asset

Management.

"But capital expenditure and the domestic economy won't pick up until Europe's

crisis abates and the US economy stabilises."