JAPAN-Nikkei-Time to go back up? Message Board

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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up?

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To: borb who started this subject	10/10/2003 7:28:58 AM
From: Julius Wong	Read Replies (1) of 3902

Bank of Japan Decides to Pump More Cash Into Economy (Update6) Oct. 10 (Bloomberg) -- Japan's central bank said it would pump more cash into the world's second-largest economy to bolster a recovery from recession and emphasize its 2 1/2 year-old policy of zero interest rates. The bank's policy board voted six to three to raise the upper limit of reserves it makes available to lenders to 32 trillion yen ($293 billion) from 30 trillion yen. The bank left monthly bond purchases from banks unchanged at 1.2 trillion yen. Bank of Japan Governor Toshihiko Fukui said the foundations for a ``moderate'' economic recovery were just being laid, and that he won't raise rates until consumer prices rise for more than a ``few months.'' Mamoru Yamazaki and other economists said his action may be directed at slowing a surge in the yen and government bond yields that threaten to slow growth. The central bank's decision ``was more of a message to tone down market speculation that the BOJ is going to tighten monetary policy,'' said Yamazaki, chief economist at Barclays Capital Japan Ltd. ``There really isn't a significant economic effect.'' Japanese Euroyen futures for June delivery rose, driving down yields 2 basis points to 0.125 percent, according to the Tokyo International Financial Futures Exchange, as traders bet the chances of a central bank rate increase were smaller. A basis point is 0.01 percentage point. Capital spending by exporters such as Sharp Corp. and Canon Inc. fueled a 3.9 percent annual pace of economic growth in the second quarter, the fastest in 2 1/2 years. The bank's action failed to reverse a rise in stocks and the yen, and a decline in bonds, on signs that a rebounding U.S. labor market will boost demand for Japanese products. quote.bloomberg.com

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