BoJ To Inject 400 Billion Yen Into Banking System

Source : Channel NewsAsia, 16 August 2007

TOKYO: The Bank of Japan (Picture:Left) announced on Thursday it will inject 400 billion yen (3.4 billion dollars) into the banking system amid renewed turmoil in global financial markets.

It was the first time in three days that the BoJ had pumped emergency funds into the financial system as part of a concerted action by global central banks to try to avert a credit squeeze caused by problems in US mortgages.

On Wednesday and Thursday, the BoJ had drained a total of 3.6 trillion yen from the domestic banking system – more than the amount it had pumped in over the past two working days – as fears of a domestic credit squeeze faded.

The Japanese central bank's latest injection came after the Tokyo stock markets tumbled for a second straight day in early deals after another rout overnight on Wall Street.

The Tokyo Stock Exchange's benchmark Nikkei-225 index of leading shares fell 339.30 points or 2.06 percent to 16,136.31 in early trading, a day after sinking 2.19 percent to an eight-month low.

Wall Street suffered another heavy sell-off on Wednesday as another big injection of funds by the US Federal Reserve into the financial system failed to calm jitters.

A persistent housing slump and rising property foreclosures in the United States have sparked a financial storm that has prompted investors to shun mortgage-backed securities and other risky investments. - AFP/so