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Thursday, 16th October 2008
In Business In Japan,

Bank of Japan offers unlimited free credit

The Bank of Japan has said it will offer unlimited free credit in an attempt to inject liquidity into the money markets.

It is hoped the move will help reduce borrowing costs around the world, increase the range of Japanese government bonds and improve the cash flow of companies.

Investment Markets reports that the decision is in line with European governments, while the US Federal Reserve has described the move as a positive one.

The Bank of Japan currently has over $950 billion in foreign exchange reserves, meaning it has a big stake in the world economy and the global financial services industry.

According to Bloomberg, the yen saw gains yesterday for the first time this week due to speculation that a $250 billion banking investment by the US Treasury will not prevent a recession.

Kenichi Yumoto of Societe Generale SA commented: "The yen is a safe-haven currency and is likely to be bought."

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