Bank of Japan offers 10 trillion in emergency funding to banks
JAPAN’S central bank announced yesterday that it would offer banks more short-term funds in a plan designed to avert the world’s second largest economy slipping back into recession.
Following an emergency meeting, the Bank of Japan said it was offering banks ¥10 trillion (£69.43bn) in three-month funds at a rate of 0.1 per cent.
The Japanese government welcomed the move but analysts said it would do little to tackle deflation, although by lowering lending rates they may halt the currency’s rally.
The central bank’s policy decision disappointed markets, which had been ready for a return to full quantitative easing. The central bank’s governor said that the policy was QE “in the broad sense that we are trying to ensure banks are not faced with liquidity constraints”.