Japanese stock-index futures climbed following a report that the nation’s public pension fund may boost its equities holdings and as the International Monetary Fund was said to support government stimulus policies.
The yen weakened beyond 100 per dollar for the first time in four years as the Bank of Japan’s deflation-fighting measures have the currency headed for its longest streak of monthly losses in almost two decades.
Bank of Japan board members forecasting an end to more than a decade of deflation may need to add to an already unprecedented monetary stimulus plan should consumer prices fail to align with their projections by October.
The Bank of Japan maintained its unprecedented plan to boost money supply at a policy meeting today, and predicted inflation will almost match its target in two years even after a report highlighted deflation’s grip.
Japan’s economy unexpectedly shrank last quarter as falling exports and a business investment slump outweighed improved consumption, bolstering Prime Minister Shinzo Abe’s case for more monetary stimulus to end deflation.
Two opposition parties said they will support Kikuo Iwata for Bank of Japan deputy governor, reducing the risk that Prime Minister Shinzo Abe will fail to win confirmation for all three of his central bank nominees.
Japan unveiled a government budget for 2013 that cuts spending for the first time in seven years, underscoring Prime Minister Shinzo Abe’s efforts to establish fiscal-discipline credentials even as he seeks to boost growth.