Japan moved sharply Thursday to stimulate its economy and end two decades of economic malaise.
Bank of Japan governor Haruhiko Kuroda announced a major shift in monetary policy for the world's third largest economy. It adopted an economic stimulus plan that has been favored by the U.S. central bank to pump more money into the American economy in an effort to spur business expansion and consumer spending.
Kuroda said the central bank would double its purchase of Japanese government bonds each month to more than $78 billion, and try to push the country's inflation rate to two percent in the next two years.
"The Bank of Japan has decided in aiming for a monetary easing both in terms of quantity and quality intended to double the money supply and achieve a two percent inflation target at the earliest possible time, within a time frame of about two years."
Japan has had two decades of economic stagnation and 15 years of price deflation. The Bank of Japan has often taken incremental steps to try to boost Japanese economic fortunes, but Prime Minister Shinzo Abe demanded that the bank take more aggressive action.
Kuroda said the bank would show no hesitation in making further policy changes.
"Both economics and finance is obviously dynamic in nature so we will show no hesitation in making appropriate adjustments as we monitor the economic activities. We have made all necessary decisions to achieve the two percent inflation target in two years."
Tokyo stock investors applauded the Bank of Japan's action, with the Nikkei index advancing more than 2 percent.