Bank of Japan Deputy Governor Kikuo Iwata declared on Oct. 27 the BOJ will keep buying assets until it hits its 2 percent inflation goal. Japan has grappled with deflation for the last dozen years, with its central bank hamstrung by a liquidity trap that’s caused consumers and companies to save the money it has injected into the economy.

The central-bank largess is buoying world stock markets, as investors seek higher returns than they can get with government bonds. Japan’s Nikkei 225 Stock Average is up 40 percent this year. The MSCI World Index, which includes both emerging and developed country markets, has risen 19 percent.

Positive Outlook

“The surprise ECB rate cut underlines our positive outlook for global equity markets,” said Trevor Greetham, director of asset allocation at Fidelity Worldwide Investments in London, who helps manage $260 billion. “A sharp rise in inflation would change things, but there’s not sign of it.”

Helped by the Fed’s loose money, the Dow Jones Industrial Average will rise to 18,000 in the next year or two, said Allen Sinai, chief executive officer of Decision Economics Inc. in New York. The gauge climbed to a record 15,783 on Nov. 11. “I’ve never seen a central bank that has been so open” to a rising stock market, he said.

Home prices also are rising. The S&P/Case-Shiller index of property values in 20 U.S. cities climbed 12.8 percent in August from a year earlier, the fastest pace since February 2006. U.K. house prices increased for a ninth month in October, while apartment values in parts of Germany have jumped by an average of more than 25 percent since 2010.

The stimulus is having less effect on economic growth, with continued weakness pressuring inflation. The International Monetary Fund cut its global outlook last month to 2.9 percent this year and 3.6 percent in 2014. Both are down 0.2 percentage point from the July forecast.

The easy money lacks punch because the “pipes” that carry stimulus from financial markets to the rest of the economy are “clogged,” Mohamed El-Erian, Pimco’s chief executive officer, said in an interview. Banks are wary of lending and companies are chary of spending after suffering the worst financial crisis and recession since the Great Depression.

Commodity prices have fallen as demand from China and other developing economies has ebbed. The Washington-based IMF forecasts oil prices will slump 7.7 percent next year while non- fuel commodities will drop 2.9 percent in dollar terms. It also projects governments will keep cutting budgets, with the aggregate deficit of advanced nations at 4.5 percent of gross domestic product this year and 3.6 percent next year.

At-Risk Region