When Shinzo Abe became Japan’s prime minister in December he delivered two messages to his central bank. First, the Bank of Japan should move to an explicit inflation target of 2 per cent. Second, it should take actions consistent with this goal. The policy overhaul announced by the BoJ this week will only satisfy the first part of Mr Abe’s wishlist.

The BoJ’s half-heartedness is regrettable. True, the previous policy goal – an inflation corridor of 0-2 per cent – was too conservative. The BoJ’s timorous monetary framework is one reason behind Japan’s prolonged deflation. But changing the target will not, on its own, generate inflation. Unless the BoJ shows it is committed to its new goal, companies and consumers will continue to hold on to their cash rather than spend it.

The BoJ should have opted for immediate, bold monetary loosening. Instead, it delayed any new round of quantitative easing until January 2014. It also announced it would mainly target short-term government debt – a strategy that has proved ineffective in the past. Finally, the BoJ did not commit to a precise time horizon by which it intends to reach its new target. Markets reacted with understandable scepticism. Rather than falling, the yen strengthened against both the dollar and the euro.