Bank of Japan moves to inject another £46bn

The Bank of Japan has offered to inject a further 6 trillion yen (£46bn) into the banking system, continuing its effort to calm markets in the wake of the yen's spike to a record high against the dollar.

That came on top of a total of 28 trillion yen already offered in same-day operations this week in the aftermath of last Friday's devastating earthquake and tsunami.

The BOJ hopes its fund injections will help ease market jitters and keep it from tapping its limited monetary policy options to support the economy.

The central bank offered 5 trillion yen in the morning, which drew just 1.12 trillion yen of bids, showing there was no strain in the banking system. It offered another one trillion yen in one-day funds in the afternoon.

Market speculation that Tokyo may intervene to stem sharp yen rises heightened after the Japanese currency hit a record high against the dollar on Thursday, amid expectations that domestic investors would repatriate cash after last week's deadly disaster.

The BOJ eased monetary policy on Monday by boosting its asset buying pool but is far from done loosening its grip on credit, and may act again next month if markets destabilise enough to threaten Japan's economic prospects, sources familiar with the central bank's thinking said.

But for now the possibility of an emergency policy meeting is slim, as the BOJ feels the priority is to continue pumping more money into the banking system through its market operations to calm market jitters, the sources said.