Bank of Japan Unveils Measures to Contain Yen, Boost Economy
Following an emergency meeting, the central bank announced a new six-month low-interest loan program to financial institutions, raising the total amount of credit available to banks to 30 trillion yen ($355 billion), The Associated Press reported. Policy-makers also voted to keep the key interest rate at 0.1%.
"With this, the bank will encourage a decline in market interest rates and further enhance easy monetary conditions," Central Bank Governor Masaaki Shirakawa said.
Financial markets were unimpressed. The Nikkei stock index rose on news of the emergency meeting, then pared gains after details were announced. The yen strengthened to 85.12 per dollar.
"There seems to a sense of fatalism," Richard Jerram, head of Asian economics at Macquarie Securities, said in a report. "The BOJ continues to play the same old game of making incremental, but ultimately meaningless policy change, in response to political pressure."
Prime Minister Naoto Kan is expected to unveil new economic stimulus measures later today.