DHAKA: The Bank of Japan has made changes to its stimulus program, in its latest attempt to spur economic growth.

The bank kept interest rates unchanged, but said it would aim to keep yields on 10-year government bonds at around current levels of zero percent.

The BoJ is also aiming push inflation above the 2% target rate, which was set more than three years ago.

It will continue to buy assets such as government bonds, at the rate of 80tn yen ($787bn) a year.

Negative interest rates have squeezed Japan’s financial sector and keeping 10-year bonds at zero percent - as opposed to allowing them to slip into negative territory - should help bank earnings and improve returns for insurers and pension funds.

Japan’s Nikkei share index rose after the announcement, while the yen weakened to about 102.5 yen against the dollar.

Analysts were skeptical about whether the policy changes would be successful.

“They seem to be determined to get the message to the market that they are going to stay on course and continue to buy bonds until they get the inflation rate above 2%,” said Tim Condon, chief economist for Asia at ING.

“I don’t think it’s going to be easy to get the 2%. It’s an Abenomics problem, not the Bank of Japan's problem.”

BDST: 1204 HRS, SEP 21, 2016
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