Home > News
  print button email button

Friday, Feb. 20, 2009

BOJ will buy ¥1 trillion in corporate bonds; rate stands


Staff writer

The Bank of Japan said Thursday it will buy up to ¥1 trillion worth of corporate bonds held by financial institutions amid the deepening recession.

After its two-day Policy Board meeting, the BOJ also said it will extend the measures already in place to keep credit flowing.

But with little room left for a further rate cut, the BOJ said it will maintain its key interest rate at 0.1 percent.

"The situation over corporate financing is very severe," BOJ Gov. Masaaki Shirakawa said at a news conference, vowing the central bank will continue to do its utmost to help the economy return to a sustainable growth path.

The BOJ decided to begin purchasing from March corporate bonds rated A or higher and with a residual maturity of up to one year to facilitate corporate financing and ensure stability in financial markets.

To help longer-term interest rates decline and relieve firms' funding concerns, the BOJ will expand special operations to supply funds by increasing their frequency from twice a month to once a week, and extending the period until the end of September.

The period of outright purchase of commercial paper from financial institutions is now extended to September.

Hiroaki Muto, senior economist at Sumitomo Mitsui Asset Management, said the decision fell within analysts' earlier projections.

"There are many extensions of the time (of temporary measures in the BOJ's latest decision)," Muto said. "The impact (upon the market) is weak."



We welcome your opinions. Click to send a message to the editor.

The Japan Times

Article 2 of 7 in Business news

Previous Next



Back to Top

About us |  Work for us |  Contact us |  Privacy policy |  Link policy |  Registration FAQ
Advertise in japantimes.co.jp.
This site has been optimized for modern browsers. Please make sure that Javascript is enabled in your browser's preferences.
The Japan Times Ltd. All rights reserved.