ID :
43228
Fri, 01/30/2009 - 05:58
Auther :
Shortlink :
https://oananews.org//node/43228
The shortlink copeid
BOJ weighs lowering longer-term rates to fight crisis: Nishimura+
UTSUNOMIYA, Japan, Jan. 29 Kyodo - The Bank of Japan has recognized the importance of pushing longer-term interest
rates lower in an attempt to fight the negative fallout from the global credit crisis on the country's financial markets and corporate finance, BOJ Deputy Governor Kiyohiko Nishimura said Thursday.
The central bank, which usually manages monetary policy by guiding its key
short-term rate, considers the overnight borrowing cost -- currently 0.1
percent -- as being at the most appropriate level, Nishimura said at a press
conference. But he also said that in order to ensure the maximum impact of the
low rate, the BOJ must keep the market functioning properly.
''It is correct to affect longer-term interest rates and (the BOJ) must devise
manners for that end,'' Nishimura told reporters even as he declined to comment
in details.
His comment came as the BOJ unveiled a plan last week to consider purchasing
corporate bonds outright. The bank will conclude ''as soon as possible''
whether to adopt that policy, the deputy chief said earlier in the day at a
meeting of local business leaders in Tochigi Prefecture.
The BOJ usually provides short-term funds to banks and other financial
institutions through its daily money market operations.
On Friday, it will start the outright purchase of commercial paper, or
short-term debt issued by companies, from those institutions as part of efforts
to facilitate corporate finance ahead of the end of the current business year
through March.
But BOJ officials say there is a view that in order to address the current
crisis, the bank needs to conduct credit-easing policies more effectively by
such means as affecting longer-term interest rates.
The BOJ decided late last year to increase the amount of long-term Japanese
government bonds the bank buys in its regular operations.
The decision came in response to ''heavy burdens'' on the bank's money market
operations, Nishimura said at the news conference, suggesting the BOJ suspects
it will not be able to overcome the current turmoil only with conventional
policies.
In addition, the bank has studied the feasibility of the bank purchasing
outright corporate bonds, which have longer maturities than commercial paper
and therefore could pose bigger risks to its own balance sheet.
BOJ Governor Masaaki Shirakawa, as well as Nishimura, have repeatedly said it
is ''exceptional'' that a central bank accepts credit risks by purchasing
corporate debt outright.
Nishimura also said Thursday the BOJ is keeping its benchmark interest rate
steady at 0.1 percent because the level is ''optimal,'' not because it cannot
set the rate even lower.
He was apparently denying market speculation that the bank does not want to
return to a zero interest rate policy.
==Kyodo
2009-01-29 22:07:48
rates lower in an attempt to fight the negative fallout from the global credit crisis on the country's financial markets and corporate finance, BOJ Deputy Governor Kiyohiko Nishimura said Thursday.
The central bank, which usually manages monetary policy by guiding its key
short-term rate, considers the overnight borrowing cost -- currently 0.1
percent -- as being at the most appropriate level, Nishimura said at a press
conference. But he also said that in order to ensure the maximum impact of the
low rate, the BOJ must keep the market functioning properly.
''It is correct to affect longer-term interest rates and (the BOJ) must devise
manners for that end,'' Nishimura told reporters even as he declined to comment
in details.
His comment came as the BOJ unveiled a plan last week to consider purchasing
corporate bonds outright. The bank will conclude ''as soon as possible''
whether to adopt that policy, the deputy chief said earlier in the day at a
meeting of local business leaders in Tochigi Prefecture.
The BOJ usually provides short-term funds to banks and other financial
institutions through its daily money market operations.
On Friday, it will start the outright purchase of commercial paper, or
short-term debt issued by companies, from those institutions as part of efforts
to facilitate corporate finance ahead of the end of the current business year
through March.
But BOJ officials say there is a view that in order to address the current
crisis, the bank needs to conduct credit-easing policies more effectively by
such means as affecting longer-term interest rates.
The BOJ decided late last year to increase the amount of long-term Japanese
government bonds the bank buys in its regular operations.
The decision came in response to ''heavy burdens'' on the bank's money market
operations, Nishimura said at the news conference, suggesting the BOJ suspects
it will not be able to overcome the current turmoil only with conventional
policies.
In addition, the bank has studied the feasibility of the bank purchasing
outright corporate bonds, which have longer maturities than commercial paper
and therefore could pose bigger risks to its own balance sheet.
BOJ Governor Masaaki Shirakawa, as well as Nishimura, have repeatedly said it
is ''exceptional'' that a central bank accepts credit risks by purchasing
corporate debt outright.
Nishimura also said Thursday the BOJ is keeping its benchmark interest rate
steady at 0.1 percent because the level is ''optimal,'' not because it cannot
set the rate even lower.
He was apparently denying market speculation that the bank does not want to
return to a zero interest rate policy.
==Kyodo
2009-01-29 22:07:48
