×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Bank of Japan drains funds from money market

Bank of Japan drains funds from money market
Comment E-mail Print Share
First Published: Wed, Oct 15 2008. 11 52 AM IST
Updated: Wed, Oct 15 2008. 11 52 AM IST
AFP
Tokyo: Japan’s central bank said it drained excess funds of 2.2 trillion yen ($21.6 billion) from the Tokyo money market Wednesday as credit market tensions eased.
The move came after the Bank of Japan (BoJ) pumped emergency funds into the financial system for 19 straight business days up to Tuesday in a bid to keep credit flowing during the turmoil on global markets.
The central bank siphoned 1.0 trillion yen from the short-term money market in the morning and 1.2 trillion yen in the afternoon.
The BoJ unveiled additional steps aimed at thawing frozen bank lending at an extraordinary meeting held late Tuesday, offering banks unlimited dollar funds.
BoJ governor Masaaki Shirakawa said global financial markets were still under extreme pressure.
“Under the circumstance, the best thing for central banks to do is secure stability in the financial markets. There are a lot of measures on top of supplying liquidity. We are focused on considering them,” he said in parliament.
The BoJ did not take part in coordinated interest rate cuts last week by world central banks, saying its key lending rate was already low at just 0.5%.
“Once again the BoJ has hammered home the point that it wants to separate liquidity provisions from macro monetary policy,” RBS Securities analysts said.
“Expect no change in the policy rate unless the economy deteriorates very significantly from here,” they said.
Japan’s Nikkei stock index soared more than 14% on Tuesday, its biggest ever gain, as world governments threw lifelines to ailing banks. The benchmark was slightly lower in afternoon trade on Wednesday.
Comment E-mail Print Share
First Published: Wed, Oct 15 2008. 11 52 AM IST