Today, the Bank of Japan announced several new policy decisions “which, together with the effective use of existing facilities to provide liquidity, are expected to contribute to further ensuring stability in financial markets and facilitating corporate financing.” The policy decisions include:

  1. Expansion of special funds-supplying operations to facilitate corporate financing
  2. Introduction of outright purchases of corporate bonds
  3. Extensions of the following temporary measures
  • Purchases of commercial paper (extended to September 30, 2009 from March 31, 2009)
  • Expansion in the range of corporate debt eligible as collateral (extended to December 31, 2009 from April 30, 2009)  
  • Expansion in the range of asset-backed commercial paper eligible as collateral (extended to December 31, 2009 from April 30, 2009)  
  • Complementary deposit facility (extended to October 15, 2009 from April 15, 2009)  
  • U.S. dollar funds-supplying operations (extended to October 30, 2009 from April 30, 2009)
  1. Inclusion of government-guaranteed dematerialized commercial paper in eligible collateral and in the list of commercial paper purchased under repurchase agreements
  2. Broadening of the range of Japanese government securities offered in the security lending facility  

The Bank of Japan assured that it “will continue to carefully assess the future outlook for economic activity and prices, closely considering the likelihood of its projections as well as risk factors, and to exert its utmost efforts as a central bank to facilitate the return of Japan's economy to a sustainable growth path with price stability.”