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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (3575)12/17/2003 11:47:06 PM
From: ild  Read Replies (1) of 110194
 
Thursday, December 18, 2003
MOF To Add Y40tln To Funding For
Currency Interventions

TOKYO (Nikkei)--The Ministry of Finance plans to increase by 40 trillion yen the amount of financing bills that it can issue to pay for currency market interventions next fiscal year, The Nihon Keizai Shimbun learned Wednesday.

This addition, which will be incorporated into the fiscal 2004 budget, and the 20 trillion yen increase already included in the supplementary budget for this fiscal year will bring the total increases planned so far to 60 trillion yen. With the increases, the MOF will have up to 140 trillion yen to spend for currency market interventions next fiscal year.

The government sets a cap on the amount of financing bills it can issue to procure funds for currency interventions. This fiscal year, the cap was set at 79 trillion yen.

In a bid to alleviate upward pressure on the yen, the government has conducted massive yen-selling interventions topping 15 trillion yen since April. As a result, the amount procured so far has already surpassed 70 trillion yen, leaving little room for additional funding.

Speculation is rising within the currency market that the government will become unable to conduct aggressive interventions if its spending nears the limit.

The government sets a cap for currency market interventions as part of the budget every fiscal year. If approved, the rise would mark the first increase of 40-60 trillion yen.

(The Nihon Keizai Shimbun Thursday morning edition)
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