TOKYO, 29th July 2016 (WAM) — The Bank of Japan expanded stimulus on Friday by doubling purchases of exchange-traded funds (ETF) and said it will conduct a thorough assessment of the effects of negative interest rates and its massive asset-buying programme, suggesting that a major overhaul of its stimulus programme may be forthcoming.

At the two-day rate review that ended on Friday, the BOJ decided to increase ETF purchases so its total holdings increase at an annual pace of 6 trillion yen ($58 billion), up from the current 3.3 trillion yen. The decision was made by a 7-2 vote.

It maintained its base money target at 80 trillion yen as well as the pace of purchases for other assets including Japanese government bonds.

It also left unchanged the 0.1% interest it charges to a portion of excess reserves financial institutions park with the central bank.

By coordinating its action with the government’s promised $272 billion economic stimulus spending package, the BOJ likely aimed to maximise the effect of its measures on the world’s third-biggest economy, which is struggling to escape decades of deflation.

“Japan is conducting a powerful mix of flexible fiscal policy and quantitative easing,” BOJ Governor Haruhiko Kuroda told a news conference after the decision. “The government’s stimulus package helps reinforce this drive and is timely in achieving sustainable growth with price stability.”

Kuroda added that “Japan‘s economy may see the pace of recovery slow for a while due to some weakness in exports and output. But it is then expected to continue expanding above its potential growth rate and expand moderately as a trend, with rising income driving spending among companies and households.”