Tags: Japan | Injects | Cash | Calm | Jitters

Japan Injects $21.8 Billion of Cash Into Markets to Calm Jitters

Friday, 07 May 2010 07:32 AM

 

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Japan's central bank pumped 2 trillion yen ($21.8 billion) into money markets Friday after global stocks hit major turbulence on escalating European debt fears and a record plunge on Wall Street.

The emergency infusion was the first since Dec. 2. and is intended to calm nerves as stock markets tumbled and the yen appreciated sharply overnight.

"We would like to ensure stability in financial markets by providing ample funds to banks," Bank of Japan official Yuichi Adachi said.

Investors dumped shares across the board in Asia after the Dow Jones industrials plunged 1,000 points at one point Thursday — the biggest drop ever during a trading day — amid fears that Greece's debt problems could halt the global economic recovery. A technical glitch is suspected of contributing to the plunge.

The benchmark Nikkei 225 stock average fell 3.7 percent to 10,295.63 in early Friday trade.

In currencies, the dollar rose to 92.48 yen in Tokyo on Friday, up from 90.78 yen in New York late Thursday. The dollar plunged to 87.95 yen in New York Thursday at one point.

The Bank of Japan's latest move underscores its commitment to keep monetary policy accommodative to help the world's second-biggest economy fight deflation and foster growth.

Board members last month agreed that the central bank needed to do more, signaling a more proactive approach. As part of those efforts, Bank of Japan Gov. Masaaki Shirakawa directed staff to find ways of financially supporting banks.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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