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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: tradermike_1999 who started this subject	11/2/2002 2:04:18 AM
From: energyplay	of 74559

Bank of Japan decides to make more Yen .... BOJ eases ahead of Japan bank plan By Bill Clifford, CBS.MarketWatch.com Last Update: 4:06 AM ET Oct. 30, 2002 TOKYO (CBS.MW) -- The Bank of Japan decided Wednesday to ease monetary policy by pumping more money into the financial system to support the government's efforts to tackle deflation and mop up trillions of yen in bad loans at Japanese banks. Tokyo's key stock indexes barely budged after the BOJ's widely expected move, announced during the afternoon session. The yen firmed, to 122.70 to the dollar from 123.05, but analysts said the central bank's easing would over the longer term likely be bearish for the yen and bullish for the dollar. The nine-member board policy board voted unanimously to increase the amount of Japanese government bonds the BOJ buys directly from the market each month by 200 billion yen to 1.2 trillion yen ($9.76 billion). The BOJ also decided to raise its target range for the outstanding balance of current-account deposits held at the central bank by private financial institutions, to 15 trillion to 20 trillion yen from the previous range of 10 trillion to 15 trillion yen. The BOJ's steps to ease credit since February precede the government's plan, expected Wednesday evening, to dispose of bad loans and end deflation. "The BoJ's move shows that it is going along with the government and more aggressive loosening can be expected," said Marshall Gittler, market strategist at Deutsche Bank. Indeed, two board members supported an increase in monthly JGB purchases to 1.4 trillion yen. "A country where the government and central bank are united in wanting to devalue the currency is not likely to have a strong currency," Gittler said in a note to clients.

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