TOKYO, Jan. 22 (Xinhua) -- The Bank of Japan (BOJ) and the Japanese government on Tuesday issued a joint statement setting a 2-percent inflation target at the conclusion of the BOJ's two-day policy meeting, paving ways for further monetary easing steps.
Japanese Prime Minister Shinzo Abe said that the issue of the joint statement was significant for bold monetary easing policy and he urged the BOJ to achieve the goal at an early date.
"The joint statement was issued after sufficient discussions with the government," said BOJ Governor Masaaki Shirakawa.
Finance Minister Taro Aso also said that he expected further monetary easing by the BOJ, and the government was not considering revising BOJ law for now.
In the statement, the government vowed to take growth strategies and restore fiscal health.
To combat prolonged deflation and achieve sustainable economic growth with price stability, the government and BOJ will enhance policy coordination, according to the statement.
Meanwhile, the bank introduced an open-ended easing steps similar to those of the U.S. Federal Reserve, such as buying government bonds and other relatively safe financial assets from financial institutions without setting a deadline.
The central bank also increased Japan's gross domestic product (GDP) outlook for fiscal 2013 to 2.3 percent from 1.6 percent and maintained the rate that banks are charged for overnight loans at 0 to 0.1 percent.
The statement said that Japan's economy is still weak and the factors that would affect Japan's economic outlook are European debt crisis, recovery of U.S. economy, sustainable economic growth in emerging economies and the relations between China and Japan.
Japan's economy has contracted for a second straight quarter in the three months through September, shrinking an annualized real 3. 5 percent. Analysts say the economy has entered a mild recession amid sluggish demand both at home and abroad.
Abe, who took office on Dec. 26, has put pressure on the BOJ to carry out bold monetary easing plans until 2 percent inflation is achieved.