On March 14th the BOJ declared that it would keep its policy interest rate, the overnight call rate (OCR), at between 0% and 0.1% for the foreseeable future (the policy was retained at its policy meeting on April 28th), pumped ¥12trn (US$145bn) in emergency funds into the money markets, announced plans to purchase ¥2trn in Japanese government bonds (JGBs) and increased the size of its asset-purchase programme from ¥35trn to ¥40trn. The BOJ's asset-purchase programme was introduced in November 2010 in an effort to counter the persistent deflationary pressures affecting the economy, and includes the purchase of risky assets such as exchange-traded funds (ETFs) and real-estate investment trusts (REITs), as well as JGBs. These efforts appear to have been successful in terms of reducing stress in the banking system, although a worsening of the crisis at the Fukushima Daiichi nuclear plant could still wreak havoc in the financial markets. More generally, only when deflation has been beaten and the economy is stronger will the BOJ be in a position to start to raise the OCR; we do not expect it to do so until the second half of 2012. Weak economic growth and persistent deflationary concerns will mean that the OCR will be raised only slowly, to stand at 2% in 2015.