BOJ to supply 1st batch of dollar funds next Thursday

TOKYO, Sept. 19 Kyodo - The Bank of Japan will conduct its first dollar funds-supply operation next Thursday as part of a coordinated action recently agreed on by major central banks in an attempt to ease liquidity strains in money markets, sources familiar with matter said Friday.

The BOJ will lend $30 billion for one month to banks and other financial institutions participating in the Tokyo money market through bidding. The bank held a closed-door briefing session Friday for officials from major Japanese and foreign banks and others, the sources said.

The central bank will inform financial institutions of the supply operation on
Wednesday morning and provide funds against certain collateral on Thursday, one
of those who attended the session told Kyodo News.
The BOJ is planning to offer another $10 billion in three-month instruments in
early October and then $30 billion for one month later in the same month. It is
considering conducting similar operations in early and mid-November, according
to the sources.
Six major central banks, also including the U.S. Federal Reserve and the
European Central Bank, announced their coordinated action on Thursday as part
of their efforts to fight the credit crisis triggered by upheavals involving
U.S. financial institutions.
For its part, the BOJ will enter a $60 billion currency swap agreement with the
Federal Reserve Bank of New York, under which the New York Fed will provide the
Japanese central bank with dollars in exchange for yen until Jan. 30 next year.
The BOJ eyes supplying up to $50 billion in outstanding balance by the end of
this year, BOJ Governor Masaaki Shirakawa told reporters Thursday.
==Kyodo