Japan Said It Is Ready To Take Action If Needed
The Bank of Japan (BOJ) left the size of its liquidity injections unchanged at ¥30 trn (US$356bn) on 7 September, after boosting it by ¥10 trn at an emergency meeting on 30 August. Last week’s emergency meeting came about following politicians’ calls on the BOJ to help stem the yen’s rise. Similarly, the BOJ held the benchmark overnight rate steady at 0.1%, the same level since the last cut in December 2008. Nevertheless, the BOJ said that it is ready to take more action, if needed, and is watching the effect of the strong yen on the nation’s economy. “We won’t rule out any policy options and will take policy action in a timely and appropriate manner if determined necessary”, said the BOJ yesterday.
The BOJ’s remarks suggest that the central bank is likely to implement further monetary stimulus if the yen, which is approaching a 15-year high against the US dollar, threatens to derail the nation’s export-led expansion. The yen
strengthened by 0.5% against the US dollar to ¥83.81/US$ at 4:41 p.m. in New York, after touching ¥83.52/US$, the strongest since June 1995. Among the steps that the BOJ could take including a further expansion of the ¥30 trn lending
programme, cutting interest rates to zero and buying more government bonds from lenders.
Tracking The World Economy...-08/09/2010
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