Bank of Japan makes record liquidity injection

AP

Thursday October 9, 6:21 am ET
Bank of Japan makes record liquidity injection of $40 billion


TOKYO (AP) -- The Bank of Japan pumped a record 4 trillion yen, or $40.3 billion, into the Tokyo money market Thursday to unthaw credit flows still frigid despite a series of interest rate cuts by central banks around the world.


The move was the central bank's largest ever single-day liquidity injection and marked the 17th straight day of emergency operations. It has added more than 25 trillion yen ($249.2 billion) to the system since the global financial crisis erupted last month.



South Korea, Taiwan and Hong Kong all slashed interest rates Thursday, following Wednesday's coordinated rate reductions led by the U.S. Federal Reserve and the European Central Bank. China's central bank also cut rates Wednesday, thought did not say if it was part of the joint action.

Still, funding conditions remained tight in Japan, especially for foreign banks.

While the Bank of Japan applauded the synchronized monetary policy moves, it did not participate in the effort.

The central bank on Tuesday left its overnight call rate at an already low 0.5 percent. Monetary conditions remain accommodative, it said in a statement, adding that it has engaged in "decisive actions of liquidity supply."