In an unexpected move, the Bank of Japan's policy board voted by a 5-to-4 margin to expand the pace of its quantitative easing, sending Tokyo stocks soaring and the Japanese yen falling sharply. The central bank expanded the size of its Japanese Government Bond purchases to the equivalent of "about 80 trillion yen" ($727 billion) a year, an increase of �30 trillion from the previous pace. It also said it would triple its purchases of exchange-traded funds and real-estate investment trusts. Concerns about dwindling inflation appeared to drive the move, with the Bank of Japan saying that "on the price front, somewhat weak developments in demand following the [April 1] consumption-tax hike and a substantial decline in crude-oil prices have been exerting downward pressure recently." It said that "if the current downward pressure on prices remains ... there is a risk that conversion of deflationary mindset, which has so far been progressing steadily, might be delayed." It also added that the so-called "quantitative and qualitative easing" program would continue "as long as it is necessary." Most economists had expected no action at the current meeting, and the surprise sent the U.S. dollar jumping to �110.25, up from around �109.37 just ahead of the decision, to hit the highest level since before the 2008 global financial crash. Likewise, Japanese stocks surged, with the benchmark Nikkei Average up more than 4% at one point, before easing slightly to a gain of 3.8%. Just prior to the announcement, the Nikkei Average was up 1.6%.
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