TOKYO (MNI) – A few of the Bank of Japan board members said the
central bank should stay on alert for a higher downside risk and take
action without ruling out any easing options, the minutes of the July
11-12 BOJ policy meeting released on Tuesday showed.
“A few members said that Japan’s economy could be adversely
affected through various channels if, for example, a substantial risk
materialized, stemming from the European debt problem,” the minutes
said.
“These members continued that the BOJ should stand ready to take
appropriate actions without ruling out any options in advance.”
At its two-day meeting last month, the BOJ’s nine-member
policy-setting panel voted unanimously to maintain practically zero
short-term interest rates and left the scale of its financial
asset-buying at Y70 trillion after raising in April from Y65 trillion.
In a technical move, the BOJ decided to integrate its three- and
six-month fixed-rate funding operations into one category with loan
durations within 6 months “in order to respond flexibly to liquidity
demand by financial institutions.”
The BOJ also lowered the scale of its combined three- and six-month
fixed-rate operations by Y5 trillion to Y25 trillion but increased the
size of Treasury discount bill operations by Y5 trillion to Y9.5
trillion.
The policy board also decided to scrap “the minimum bidding yield
(currently 0.1%) for the outright purchases of Treasury discount bills
and CP in order to ensure their smooth purchases.”
The decision is aimed at coping with continued undersubscription at
the bank’s six-month fixed-rate fund-injecting operations for the 14
straight bidding since April 16 until the July 11-12 meeting.
tokyo@marketnews.com
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