BOJ's post-quake fund injections top 100 tril. yen+

TOKYO, Japan, March 23 Kyodo -
The Bank of Japan on Wednesday offered an additional 8.09 trillion yen (about $100 billion) to money markets to support financial institutions seeking funds after the March 11 earthquake, bringing the total amount made available under the central bank's emergency operations to 100.6 trillion yen.
The balance of current account deposits held by commercial banks and other institutions at the BOJ, or the sum of money they can use freely, rose to a record 41.83 trillion yen. It is expected to increase further Thursday.
The BOJ did not immediately inject liquidity on Wednesday for the first time in seven operating days but conducted an auction and decided to provide additional funds on Thursday, Friday and Monday to the Tokyo money market, where financial institutions lend short-term money to each other.
A surge in demand for cash, seen in the market right after the earthquake, has calmed down recently, according to market participants.
Also on Wednesday, a BOJ Policy Board member raised concern about the recent move by some lawmakers to force the central bank to finance reconstruction work following the devastating quake and tsunami.
Ryuzo Miyao said that any government bond issuance significantly dependent on purchase by the BOJ would hurt public trust in the yen.
''Generally speaking, it would damage trust in the yen,'' Miyao said at a press conference in the city of Oita, referring to a possible consequence of the bank printing a large sum of money.
The warning, which echoed the view of BOJ Governor Masaaki Shirakawa, came as some ruling and opposition lawmakers are arguing that the BOJ should purchase long-term bonds directly from the government -- a move basically banned by a law -- and help the government draw up extra budgets for reconstruction after the disaster.
The BOJ disapproves of such a policy, known as monetization, and only purchases government bonds from financial institutions in markets under certain rules as part of its daily operations to adjust monetary conditions.
Shirakawa told a Diet committee on Tuesday that past experience demonstrates that the policy is highly likely to ''set off raging inflation...(and) damage public trust in the (Japanese) currency.''