dazu ergreift sie zwei Maßnahmen:

1.
"it will raise its target for commercial lenders' excess current account reserves at the central bank to 6 trillion yen ($49 billion) from 5 trillion yen."

2.
"it will increase the amount of government bonds it buys from investors, without repurchase agreements, to 600 billion yen a month from 400 billion yen."

Der ganze Text:

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08/14 00:30

BOJ Boosts Money Supply, Says Economy Is Worsening (Update1)
By Mayumi Otsuma

Tokyo, Aug. 14 (Bloomberg) -- The Bank of Japan unexpectedly said it will boost money supply, heeding politicians' pleas to stem price declines and stop a slide in the world's second-largest economy.

Stocks and Bonds rose and the yen fell after the central bank said it will raise its target for commercial lenders' excess current account reserves at the central bank to 6 trillion yen ($49 billion) from 5 trillion yen.

The bank also said it will increase the amount of government bonds it buys from investors, without repurchase agreements, to 600 billion yen a month from 400 billion yen.

``Recent economic data indicated the economy is worsening at a faster pace than we had expected -- and probably faster than the BOJ had expected,'' Tomoko Fujii, a senior economist at Nikko Salomon Smith Barney Ltd, said before the bank announced the decision. ``The economy has already slid into a critical condition and the central bank should have acted much earlier.''

The yen fell to 123.13 to the dollar from 122.39 just before the BOJ announced its decision. The benchmark Nikkei 25 stock index rose as much as 3.5 percent led by Mizuho Holdings Inc. and other banks. The 10-year bond yield fell 1.5 basis points to 1.285 percent.

The BOJ said it acted because the economy is worsening, and there is an increased risk the deterioration will spread beyond the industrial sector. ``The bank considered it appropriate and necessary to further strengthen monetary support for economic recovery,'' it said in a statement.

Surprise Move

A policy shift wasn't widely expected today.

Eleven of 13 economists, currency traders and fund managers polled by Bloomberg News last week said they had expected the bank to make no policy change this month.

Still, the bank had been under growing government pressure to act.

The International Monetary Fund said Friday the central bank should raise the reserve target to boost money supply. The IMF lowered its economic forecast for Japan, saying it expects the world's second-largest economy to shrink 0.2 percent this year after projecting 0.5 percent growth in April.

Japanese Finance Minister Masajuro Shiokawa said he urged Hayami to ``seriously consider'' measures to stop prices falling. Economic and Fiscal Policy Minister Heizo Takenaka, who attended the BOJ meeting, earlier called on the bank to ``take measures that harmonize with our structural reform efforts.''

The BOJ guided the key interbank overnight lending rate to near zero on March 19 and raised its target for excess reserves by 1 trillion yen to 5 trillion yen. The bank also said it's ready to raise the reserve target further or buy more bonds from investors if needed to boost money supply.

Minutes of the meeting will be published on Sept. 25.

Eyeing September

A stock-market slump added to pressure on policy makers, especially as commercial banks prepare to report the value of their assets when they close their six-month books on Sept. 30. A plunge in share prices increases unrealized losses on banks' balance sheets and may drive weaker lenders into insolvency.

``For the BOJ, the fragility of stock prices is probably its biggest concern now,'' said Hiromichi Shirakawa, chief economist at UBS Warburg (Japan) Ltd.

Gross domestic product shrank 0.2 percent in the first quarter from the fourth and will probably contract the same margin by the second quarter, according to the latest Bloomberg survey. Second- quarter figures will be released on Sept. 7.

Industrial production fell a bigger-than-expected 0.7 percent in June from May, a fourth straight month of decline.

Machinery orders, a key index of Japan's business investment, declined a bigger-than-expected 6.6 percent in June.

Deflation is a growing threat. Tokyo-area consumer prices, a bellwether of the country's inflation, haven't risen from year- earlier levels for 22 months.

As Japan's economy deteriorates, the cabinet is preparing measures intended to bring it back to health in the long run, although they may add to the pain in the next year or two.

Prime Minister Junichiro Koizumi has also pledged to wean companies of government handouts, slash spending and force banks to clean up their balance sheets. Those measures are likely to throw more Japanese out of work, government officials have said, at a time of record high unemployment of 4.9 percent.

Japan's cabinet last week approved the government's proposal to cut general budget spending by 1.8 percent next year from this year, the first decline in four years.

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