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TOKYO: The Bank of Japan decided at an emergency policy meeting Monday to expand its funding programme introduced in December in an effort to safeguard a fragile recovery threatened by a strong yen.
The emergency meeting followed strong government pressure on the Bank to try to curb the yen's rise and take steps to support an economy mired in deflation, after the unit hit a 15-year high against the dollar last week.
The bank said it would offer around 10 trillion yen (118 billion dollars) in six-month loans in addition to the 20 trillion yen of an existing three-month loan programme that started in December.
Domestic financial institutions will therefore be able to borrow a total of 30 trillion yen from the central bank for maximum of six months against pooled collateral.
The bank decided to leave its key interest rate unchanged at 0.1 per cent.
"With this, the Bank will encourage a decline in market interest rates and further enhance easy monetary conditions", it said in a statement.
"The Bank believes that the monetary easing measure, together with the government's efforts, will be effective in further ensuring Japan's economic recovery."
-AFP/wk
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