A pedestrian walks past the Bank of Japan building in Tokyo, May 22, 2013. REUTERS/Yuya Shino
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The Bank of Japan made an abrupt shift Wednesday to targeting interest rates on government bonds to achieve its elusive inflation target, after years of massive money printing failed to jolt the economy out of decades-long stagnation. While the BOJ reassured markets it would continue to buy large amounts of bonds and riskier assets, the policy reboot appeared to open the door for an eventual winding down of its huge asset purchases, and tried to repair some of the damage caused by its shock move to negative rates early this year.In setting rate targets for financial institutions' excess cash deposits and 10-year government bonds, the BOJ looked set to exert unprecedented control over bond market rates to try to spark life into Japan's economy.
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