BOJ might buy more government bonds

BOJ might buy more government bondsJapan's central bank, the Bank of Japan (BOJ) is expected to announce new plans to buy more government bonds and take aggressive actions to boost the economic growth in the country following the general elections in the country.

The Bank of Japan said on Thursday that it is expanding its scheme to purchase treasury bills and government bonds by 10 trillion yen or about $119 billion. The latest addition would take the total to a whooping 101 trillion yen and is aimed at reviving the slowing growth in the world's third largest economy.

Shinzo Abe's Liberal Democratic Party won 294 seats in Japan's 480-member lower house of parliament, according to reports. Prime Minister Yoshihiko Noda's Democratic Party of Japan lost three- fourths of its members. The new government is expected to make BOJ act more aggressively to take steps to revive the economy.

Main opposition party leader Shinzo Abe appears to be favoring more fiscal and monetary stimulus and has even asked the central bank to keep the interest rates at zero or even at sub zero levels. BoJ is also offering unlimited loans to banks in the country boost domestic demand and encourage lending. The demand for credit in the Japanese economy has been affected due to deflation and a high exchange rate. The situation has prevented the country from boosting its domestic consumption in recent years.

Experts say that the measures would help the economy but the central bank is required to further steps to boost the economic growth.