Boj To Buy 1.2 Trillion Yen In National Bonds

BOJ to buy 1.2 trillion yen in national bondsThe Bank of Japan says it will purchase 1.2 trillion yen worth of long-term Japanese government bonds from financial institutions as a way to pump more money into the economy.

The central bank announced the policy on Monday.

The move is the first since the BOJ decided last week to take a drastic approach to further monetary easing. It says it will double the funds it supplies to the market over 2 years, with the aim of reaching its 2-percent inflation target to end deflation.

The operation to buy about 12 billion dollars worth of national bonds will be the largest ever by the central bank. Officials say they will buy 10 billion dollars worth of bonds that mature in 5 to 10 years. The rest would be spent on longer-term bonds.

The purchase of national bonds will be conducted by bids from financial institutions. The BOJ says it has already received bids for twice the volume of bonds than expected.

Officials at the Tokyo bond market are monitoring how the purchases affect the yield of the benchmark 10-year bond. It hit a record low of 0.315 percent last week before showing volatile fluctuations.