Nikkei leaps as BOJ springs a surprise

Tokyo

IN one of the closest votes in its history, or that of any other major central bank, the Bank of Japan's nine-member Policy Board voted on Friday by five votes to four to launch a major new round of monetary easing that shocked and delighted financial markets.

The surprise move sent Tokyo stocks soaring to a seven-year high while the yen fell to its lowest level since 2008.

The BOJ's dramatic moves will result in the central bank buying 100 per cent of new Japanese Government Bond (JGB) issues as well as significant extra amounts of private sector financial securities, prompting suggestions by some analysts that it is now "financing" the government's huge fiscal deficit.

The Policy Board's hairline majority vote - with BOJ governor Haruhiko Kuroda among those in favour - was taken on the ground that without further monetary stimulus the Japanese economy could be at risk of falling back toward deflation, especially with oil prices on a falling trend globally,…