The Bank of Japan said it will begin buying shares held by banks on 29 November as part of a plan to stabilise the financial system. The central bank said banks which intend to sell their shareholdings should apply by 25 November.
The agreement on the timetable follows the Bank of Japan's announcement on 11 October that it would spend a total of two trillion yen worth of stock from banks, with the program lasting until September 2003 The move is aimed at cutting bank's investment losses amid a slump on the nation's stock markets, which have fallen to their lowest level in 19 years. However, concern over the use of public money to assist the banks and over how the proposal will actually work, has weakened bank stocks in recent weeks, with the Nikkei index in Tokyo falling to fresh nineteen year lows last week The central bank said it will identify the commercial banks from which it will buy shares on 26 November and revealed that it will extend the buying period to September 2004 if the two trillion yen level is not hit initially.
It will buy stocks at market price and will hold the shares for at least five years. //www.fxcentre.com