“Jan 18 (Reuters) – The Bank of Japan will next week mull scrapping its 0.1 percent floor on short-term interest rates and pledging to buy assets open-endedly until 2 percent inflation is foreseen, sources familiar with the central bank’s thinking said.
Such steps would surprise the markets, which have been expecting the central bank to settle on the more conventional step of topping up its asset-buying and lending programme by another 10 trillion yen ($113 billion).
Under relentless pressure from Prime Minister Shinzo Abe for bolder steps to beat deflation, the central bank is likely to double its inflation target to 2 percent and consider expanding monetary stimulus again at its two-day rate review that ends next Tuesday, sources told Reuters last week.
Instead of topping up the asset-buying and lending programme again, the BOJ may pledge to buy assets open-endedly until 2 percent inflation is in sight, without setting a specific date for completing the purchases, the sources said….”
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