Sunday, March 13, 2011

Bank of Japan braced to stabilize markets against quake and tsunami panic

The Bank of Japan will act quickly to stabilize the markets and the banking system when its monetary board meets on Monday.

Bank of Japan Governor Masaaki Shirakawa said on Sunday the central bank would provide huge amounts of liquidity to the banking system, reinforcing the bank's determination to keep markets stable in the wake of the devastating earthquake that struck northeastern Japan.

The BoJ is likely to provide Y2000bn-Y3000bn ($24.4bn-$36.6bn) in funds through its market operations Monday morning, two to three times the normal amount, to soothe markets and keep short-term borrowing costs from spiking, Reuters reported.

Economics Minister Kaoru Yosano said the government would fight decisively against speculative moves and would not tolerate short selling to take advantage of the quake. (read more)