Will Bank of Japan go for broke in the face of looming recession?

Tokyo

ABENOMICS, the set of policies adopted by Prime Minister Shinzo Abe nearly three years ago as a weapon with which to fight Japan's long economic stagnation, will face a critical test on Friday this week when the Bank of Japan (BOJ) - a key player in implementing Abenomics - holds its latest Policy Board meeting.

Two rounds of aggressive monetary easing by the BOJ have failed to put the world's third largest economy back on a sustained recovery path - it is now on the brink of its second recession in the space of a year - and markets are keyed up waiting to see whether the central bank will "go for broke" by launching a third round of easing.

Last week's renewed easing by the European Central Bank under its president Mario Draghi and the subsequent announcement by the People's Bank of China that it was reducing interest rates again have raised market expectations of fresh easing by the BOJ, even as the …