The Bank of Japan may have fired the first shot in a new round of central bank action to prop up the global economy as recoveries in industrial nations falter. The unexpected decision by the Japanese central bank Tuesday to drop its interest rate to 'virtually zero' and expand its balance sheet comes as Federal Reserve policy makers move toward more unconventional easing. Bank of England officials will consider further stimulus Thursday, while the central banks of Australia, Canada and New Zealand are among those now holding fire on further interest-rate increases. The renewed push toward easier monetary policy comes as the International Monetary Fund warns growth in advanced economies is falling short of its forecasts ahead of its annual meetings in Washington this week. The dilemma for policy makers is that their actions may do little to revive growth and end up roiling currency markets. 'The Bank of Japan is at the head of the pack,' said Stewart Robertson, an economist at Aviva Investors in London, which manages about $370 billion in assets. 'It looks like a lot of others will follow. Whether it's right or not is another matter.' The Bank of Japan cut its overnight call rate target from 0.1 percent and established a $60 billion)fund to buy government bonds and other assets. It moved as the yen's surge to a 15-year high last month hurts exports and damps economic growth. The yen traded at 83.27 per dollar Tuesday, close to a Sept. 15 record of 82.88. Bank of Japan Governor Masaaki Shirakawa may not be alone for long in taking action and Daiwa Institute of Research argues he's now engaged in a 'vicious spiral' of monetary easing with the Fed as both compete to bolster their economies. 'The BOJ's next moves will depend on the Fed,' said Maiko Noguchi, an economist at Daiwa in Tokyo. 'The bank will have no choice but steadily take easing measures.' Fed Chairman Ben Bernanke and his colleagues have signaled they may announce the purchase of more Treasuries as soon as their next policy meeting on Nov. 2-3 in an effort to boost growth and reduce an unemployment rate stuck near 10 percent for the past year. Bernanke said on Oct. 4 that the Fed had aided the economy by buying $1.75 trillion of mortgage debt and Treasuries from August 2008 through March 2010. Pacific Investment Management Co. says a new round of quantitative easing, the policy of creating money by enlarging the central bank's balance sheet, is 'likely.' 'The bottom line for the U.S. is a growth trajectory so slow you'd nearly call it stalled,' Paul McCulley, a portfolio investor at Pimco wrote on the company's website this week. Steven Englander, New York-based head of Group of 10 currency strategy at CitiGroup, said he anticipates the dollar will continue to fall, with the euro likely to pass through $1.40 from $1.37 Tuesday. The dollar has already dropped 7 percent against the euro since the start of September. At the Bank of England, policy maker Adam Posen made the strongest call yet on Sept. 28 for the British central bank to resume asset purchases after keeping its bond-buying program at $317 billion for the past 11 months. That proposal lays the ground for the first three-way split when the Monetary Policy Committee meets Thursday, with member Andrew Sentance advocating higher interest rates. 'At the present time, the growth threat is more of a danger than inflation,' said Graeme Leach, chief economist at the Institute of Directors, a London-based business lobby group. 'Yes, inflation is above target now. But a double-dip recession would raise the specter of deflation.' The revival of quantitative easing is a reversal from earlier this year, when central banks were halting stimulus or debating how to tighten policy. What's changed is the loss of momentum in industrial economies. John Lipsky, the IMF's No. 2 official, said that global growth in the second half of the year will fall short of the fund's 3.75 percent forecast. The Washington-based lender revises its outlook Wednesday. The question for those central banks leaning toward buying more assets is whether doing so will actually bolster expansion, said Charles Dumas, director of international research at Lombard Street Research, a London-based consultancy. 'Is quantitative easing going to cause people to spend more? I don't think so,' he said. 'It does add value in reducing the risk of a downward spiral in markets.' Another risk is that the use of unconventional monetary policy is viewed as an effort to weaken currencies to boost exports, rising competitive devaluations and protectionist responses, said Eric Chaney, chief economist at AXA Group in Paris. Japan, Switzerland and Brazil are among the countries that have already intervened in markets to restrain their exchange rates. 'This is close to a currency war,' said Chaney, a former official at the French France Ministry. 'It's not through exchange-rate manipulation, but through monetary policies.' 