News Summary: Japan sets 2 pct inflation target

TARGET DEFLATION: The Bank of Japan bowed to government pressure Tuesday, setting a 2 percent inflation target aimed at helping the country emerge from its prolonged bout of deflation.

ASSET PURCHASES: The central bank also revealed plans for "open-ended" central bank asset purchases similar to the strategy followed by the U.S. Federal Reserve to keep market interest rates low. But the purchases won't start for a year.

GOVERNMENT INFLUENCE: Japan's Prime Minister Shinzo Abe began to lobby for easing monetary policy before he took office in December. He said aggressive action was needed for the world's No. 3 economy to escape from years of falling prices. His government aims to spur growth both through heavy government spending and monetary easing.