European Central Bank governors on Thursday began weaning the eurozone economy off the high doses of support they prescribed in recent years, even as they remain far away from reaching their elusive inflation target.
From January, the Frankfurt institution said it will reduce its purchases of government and corporate bonds to 30 billion euros ($35 billion) a month, from 60 billion at present -- in line with analysts' expectations.
Policymakers left themselves a nine-month horizon to decide on the next step for the programme, with a move due by September 2018.
ECB president Mario Draghi said the decision was "prudent" and that the bank did not intend to halt the stimulus programme suddenly.
He remained "confident" of returning price growth to the ECB goal of just below 2.0 percent -- believed to be most favourable for growth -- but added policymakers must remain "persistent and patient" along the way.
Explaining the decision to start winding down the programme, he hailed an "increasingly robust and broad-based economic expansion" in the 19-nation single currency area, saying central bank interventions had helped create seven million jobs.
But he said the economic outlook and raising the sluggish rate of inflation "remain conditional on continued support from monetary policy".
The euro fell by nearly one percent to around $1.1699 by 1550 GMT as investors digested Draghi's comments.
In Frankfurt, the DAX index of German blue-chip shares briefly touched an all-time high of 13,144.65 points, before slightly falling back.
The reduction in bond buys is a sign that the ECB sees less need for it to pump cash into the financial system to support lending to businesses and households, a key factor in the economic recovery that has pushed growth up and unemployment down in the eurozone.
But Draghi stressed that the bank stands ready to increase its so-called "quantitative easing" (QE) bond purchases again if the economy should stumble.
And he added that the bank would continually reinvest money flowing back from matured securities, thereby maintaining an "ample degree of monetary stimulus".
Meanwhile, the ECB held its interest rates at historic lows as another incentive for loan growth, and signalled they would remain there for some time to come.
"Today's decision is a sea-change but a very gentle one, not a big-bang U-turn," ING Diba bank economist Carsten Brzeski commented.
"The ECB wants to start the exit as cautiously as possible."
The ECB began buying massive amounts of bonds in 2015 to fight the threat of deflation -- a damaging downward spiral of prices and activity.
Since then, the state of the eurozone economy has improved -- even after a first reduction in purchases last April, from 80 to 60 billion euros a month.
In the first half of this year, eurozone economic growth powered to 2.4 percent in annualised terms, outdoing even optimistic forecasts, while unemployment has fallen to an eight-year low of 9.1 percent.
ECB policymakers say they have made it easier for businesses and households to borrow sorely-needed money for spending, investment or hiring.
Some on the ECB's governing council long remained reluctant to withdraw their powerful medicine, fearing they might nip the recovery in the bud by tightening access to money -- a fate that the US Federal Reserve suffered in 2013.
Other governors have warned of the risks of easy money, arguing it has softened the market discipline and could lead to credit-fuelled price bubbles, with some pointing to rising property markets in popular eurozone cities.
By lowering the amount it spends on bonds each month, but extending the duration, the bank can keep supporting the economy -- even as it acknowledges healthier growth and makes a concession to fears it has gone too far.
The ECB would have bought some 2.5 trillion euros in bonds come September 2018.
The path to unwinding stimulus has been made more complicated by the recent strength of the euro, which has gained over 12 percent against the dollar this year.
A more expensive euro could brake eurozone inflation and economic activity, placing the price growth target even further out of reach.
With eurozone inflation stubbornly low -- reaching just 1.5 percent in September -- the ECB has vowed not to raise interest rates until "well past" the end of bond-buying.
"The earliest date possible for a rate hike would be March 2019, or more likely June 2019 if the ECB tapers QE in full between September and early 2019," Pictet Wealth Management analysts said in a note.