The Bank of Japan announced a major shift in itsmonetary policy from targetting interest rates to theoutstanding balance of reserves, which will allow thekey overnight lending rate to fall nearly to zero. Thetarget for daily banking reserves has been increasedby Y1 trillion to Y5 tln and will stay at this level untilconsumer prices stabilise above zero. The BOJ willalso buy more government bonds above the Y400bln limit to implement its new target.