The Nikkei 225 closed lower in trading this morning (January 21st) ahead of the Bank of Japan's (BoJ) highly anticipated meeting, which is expected to tackle the thorny issues surrounding the state of the Japanese currency.
Government advisor Koichi Hamada has laid out a clear path for the yen and said Tokyo would intervene if the currency – which rose versus the pound today – depreciated too much.
The BoJ's two-day conference is expected to result in a significant alteration of monetary policy for the central bank and it is anticipated to change its inflation target from one to two per cent and raise its existing bond-purchasing programme.
Incumbent BoJ governor Masaaki Shirakawa will step down from the top job in April 2013 and Japan's new government is eager to nominate a new central bank boss who will be more aggressive with regard to dealing with deflation.
At close of play in the Japanese capital this morning, the Nikkei 225 fell by 1.5 per cent to an index value of 10747.7 points.
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