Fresh 'cash injections' awaited
Tuesday, August 14, 2007
JAPAN'S central bank announced yesterday another large cash injection into the banking system as part of global efforts to shore up financial markets, helping Tokyo stocks to rally in early deals.
Central banks in other countries have also made similar moves.
The Bank of Japan said it had injected 600 billion yen (US$5 billion) into the money market to avert liquidity shortages as a result of problems in the US sub-prime mortgages sector for risky borrowers.
The Bank of Japan had already pumped one trillion yen into the financial system on Friday, when the US and eurozone central banks took similar action.
"The entire financial sector is volatile," said Shinichi Tamura, a banking analyst at UBS Securities Japan.
"Under such circumstances, the Bank of Japan injected capital to ease market worries" after sharp recent falls in global share prices, he added.
Worries about problems in the US mortgage market have caused liquidity to drain out of money markets as private banks withhold funds, prompting the Japanese, US, eurozone and other central banks to offer extra cash.
The US Federal Reserve pumped a further US$38 billion into the US banking system on Friday, its biggest operation since shortly after the September 11, 2001 terrorist attacks.
The European Central Bank for its part injected €155.85 billion euros (US$212.98 billion) into the eurozone banking system over Thursday and Friday.
In Geneva, Switzerland's central bank made two unusual cash injections totalling 3.14 billion Swiss francs (US$2.62 billion) into international money markets last week, according to weekly data released yesterday.
In Seoul, South Korea is ready to inject liquidity into the banking system if needed to avert liquidity shortages after turbulence on global financial markets, officials said yesterday.In Kuala Lumpur, there is no necessity to inject liquidity into the financial system as Malaysia has sufficient funds to ward off any adverse effect of the US sub-prime loans crisis, Bank Negara Malaysia's governor Tan Sri Dr Zeti Akhtar Aziz said yesterday.
Agencies
Central banks in other countries have also made similar moves.
The Bank of Japan said it had injected 600 billion yen (US$5 billion) into the money market to avert liquidity shortages as a result of problems in the US sub-prime mortgages sector for risky borrowers.
The Bank of Japan had already pumped one trillion yen into the financial system on Friday, when the US and eurozone central banks took similar action.
"The entire financial sector is volatile," said Shinichi Tamura, a banking analyst at UBS Securities Japan.
"Under such circumstances, the Bank of Japan injected capital to ease market worries" after sharp recent falls in global share prices, he added.
Worries about problems in the US mortgage market have caused liquidity to drain out of money markets as private banks withhold funds, prompting the Japanese, US, eurozone and other central banks to offer extra cash.
The US Federal Reserve pumped a further US$38 billion into the US banking system on Friday, its biggest operation since shortly after the September 11, 2001 terrorist attacks.
The European Central Bank for its part injected €155.85 billion euros (US$212.98 billion) into the eurozone banking system over Thursday and Friday.
In Geneva, Switzerland's central bank made two unusual cash injections totalling 3.14 billion Swiss francs (US$2.62 billion) into international money markets last week, according to weekly data released yesterday.
In Seoul, South Korea is ready to inject liquidity into the banking system if needed to avert liquidity shortages after turbulence on global financial markets, officials said yesterday.In Kuala Lumpur, there is no necessity to inject liquidity into the financial system as Malaysia has sufficient funds to ward off any adverse effect of the US sub-prime loans crisis, Bank Negara Malaysia's governor Tan Sri Dr Zeti Akhtar Aziz said yesterday.
Agencies
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