To counter the ongoing contraction in Japanese economy, the Bank of Japan (BOJ) has maintained its asset purchase program to end the deflationary economic stance. As the economy is forecasted to contract in the fourth quarter of the year, the BOJ’s move to tackle the contraction in the economy, via the sought asset purchase program, has eventually provided a supporting base to Asian stock. Asian corporation’s stock prices have risen up to 8.8 percent, including companies from Japan and Australia, amidst sought easing program by BOJ.

The inflation target of 2 percent has remained unchanged as BOJ’s governor and other high ranked officials have left the monetary policy unchanged.  In line with the target to achieve the sought inflation of 2 percent, the BOJ has pledged to execute open ended asset purchase program to stimulate the economy and provide a supporting ground to the economy for growth.

In a bid to project Japanese economic growth, experts and economists had projected the GDP to grow by 0.4 percent, but unlike the projection, the economy contracted by 0.4 percent (annualized) in three months through the month of December, 2012. This justifies the rationale behind BOJ’s asset purchase program as a counter-deflation measure.

Despite BOJ’s move has eventually led to market optimism in the Japanese economy, providing a multiplier base to the economic components, it has also been seen as a diplomatic effort of Japanese government to promote Japanese economy in the global arena. At the time, when Japanese economy is facing the harsh reality of deflationary situation, the stimulus measures, on the other hand, shall be actively devaluating Japanese Yen relative to other strong currencies, for instance, Euro and Dollar.

No matter towards which ever direction this currency war may head, this move of BOJ, obviously in coordination with the government of Japan, is likely to ultimately support the Japanese economy in boosting the country’s GDP, promote export and most importantly, at the end of the day, support domestic economy.

By the end of the year 2014, the entire global economy would have known and realized the implications and significance of this ongoing asset purchase program and farsightedness of Japanese policy makers, economists, concerning ‘economy correction mantra.’ If everything goes as planned for Japanese economy, this could a vital lesson to other core global economies on countering economic austerities and promoting the theme ‘everything for the domestic economy.’