TOKYO - Japan's central bank said Friday it would inject emergency funds of 1.2 trillion yen (10.5 billion dollars) into the financial system after fears of a credit squeeze wreaked fresh havoc on global markets. The Bank of Japan pumped extra funds into the money market for a second day in a row as part of a concerted global effort by major central banks to calm fears about the fallout from problems in the US mortgage sector.
On Thursday, the BoJ had injected 400 billion yen into the banking system to try to stabilise short-term interest rates, having drained funds for the two previous days as fears of a credit crunch in Japan eased.
Central banks from Sydney to Washington have together pumped billions of dollars into the global financial system in recent days amid signs that private banks and firms are having trouble raising funds and rolling over debt.
The US Federal Reserve injected a further 17 billion dollars into the US banking system on Thursday, bringing to 88 billion dollars the amount it has funnelled into the financial markets in the past week.
But the moves by the world's top central bankers have provided only limited comfort to panicky investors amid signs that hedge funds are being forced to dump shares to cover losses in mortgage-backed securities. - AFP/ir
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