Bank of Japan announces massive asset-purchase programme

£90bn of government assets purchased each month starting in January 2014.

The Bank of Japan has made its much-foreshadowed move to attempt to end the years of deflation the country has faced. This morning, it announced that it was repositioning its inflation target from 1 per cent to 2 per cent, and that it would aim to achieve that rate "at the earliest possible time".

The plan involves more than just expectations management, as well. Until the end of this year, the bank will continue with its ¥101trn round of quantitative easing, but from January 2014 it will begin buying ¥13trn — over £90bn — of assets, mostly short-term government debt, each month. The hope is that the massive burst of asset purchases will act to spike inflation, but there are indications that the government also plans to use some of the revenue this monetary policy will accord to it for fiscal stimulus.

As well as being higher than it was before, the inflation target is also stronger, replacing a "vaguely-worded “goal” for price stability over the medium to long-term", according to the Financial Times. That goal was not thought to be symmetrical, either: it merely targeted a positive rate of inflation below 2 per cent. Non-symmetric targets tend to inspire a tendency to undershoot (because if 1.9 per cent is OK but 2.1 per cent is terrible, no bank will aim for 2 per cent inflation), compounding the problems.

The news is not likely to please Germany's chief banker, Jens Weidmann, who yesterday warned of the danger of a government intervening too strongly in the actions of a central bank. Weidmann said in a speech at a Deutsche Boerse event that:

Already alarming violations can be observed, for example in Hungary or Japan, where the new government is interfering massively in the business of the central bank with pressure for a more aggressive monetary policy and threatening an end to central bank autonomy. A consequence, whether intentional or unintentional, could moreover be an increased politicisation of exchange rates.

But Weidmann is complaining into dead air, at this point. Japan's popular nationalist new prime minister, Shinzo Abe, is determined to restore the country to growth by any means possible. A recent tax bill, passed before his election, contains a (non-binding) target of 3 per cent nominal growth and 2 per cent real growth (implying a 1 per cent rate of inflation), which he is likely to adopt as a target for his own government. To achieve that, he needs some aid from the Bank of Japan — aid which he has secured. The question now is whether the bank will be allowed to return to independence when its job is done.

The Bank of Japan. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Cabinet audit: what does the appointment of Andrea Leadsom as Environment Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for Environment, Food and Rural Affairs.

A little over a week into Andrea Leadsom’s new role as Secretary of State for Environment, Food and Rural Affairs (Defra), and senior industry figures are already questioning her credentials. A growing list of campaigners have called for her resignation, and even the Cabinet Office implied that her department's responsibilities will be downgraded.

So far, so bad.

The appointment would appear to be something of a consolation prize, coming just days after Leadsom pulled out of the Conservative leadership race and allowed Theresa May to enter No 10 unopposed.

Yet while Leadsom may have been able to twist the truth on her CV in the City, no amount of tampering will improve the agriculture-related side to her record: one barely exists. In fact, recent statements made on the subject have only added to her reputation for vacuous opinion: “It would make so much more sense if those with the big fields do the sheep, and those with the hill farms do the butterflies,” she told an audience assembled for a referendum debate. No matter the livelihoods of thousands of the UK’s hilltop sheep farmers, then? No need for butterflies outside of national parks?

Normally such a lack of experience is unsurprising. The department has gained a reputation as something of a ministerial backwater; a useful place to send problematic colleagues for some sobering time-out.

But these are not normal times.

As Brexit negotiations unfold, Defra will be central to establishing new, domestic policies for UK food and farming; sectors worth around £108bn to the economy and responsible for employing one in eight of the population.

In this context, Leadsom’s appointment seems, at best, a misguided attempt to make the architects of Brexit either live up to their promises or be seen to fail in the attempt.

At worst, May might actually think she is a good fit for the job. Leadsom’s one, water-tight credential – her commitment to opposing restraints on industry – certainly has its upsides for a Prime Minister in need of an alternative to the EU’s Common Agricultural Policy (CAP); a policy responsible for around 40 per cent the entire EU budget.

Why not leave such a daunting task in the hands of someone with an instinct for “abolishing” subsidies  thus freeing up money to spend elsewhere?

As with most things to do with the EU, CAP has some major cons and some equally compelling pros. Take the fact that 80 per cent of CAP aid is paid out to the richest 25 per cent of farmers (most of whom are either landed gentry or vast, industrialised, mega-farmers). But then offset this against the provision of vital lifelines for some of the UK’s most conscientious, local and insecure of food producers.

The NFU told the New Statesman that there are many issues in need of urgent attention; from an improved Basic Payment Scheme, to guarantees for agri-environment funding, and a commitment to the 25-year TB eradication strategy. But that they also hope, above all, “that Mrs Leadsom will champion British food and farming. Our industry has a great story to tell”.

The construction of a new domestic agricultural policy is a once-in-a-generation opportunity for Britain to truly decide where its priorities for food and environment lie, as well as to which kind of farmers (as well as which countries) it wants to delegate their delivery.

In the context of so much uncertainty and such great opportunity, Leadsom has a tough job ahead of her. And no amount of “speaking as a mother” will change that.

India Bourke is the New Statesman's editorial assistant.