Tokyo, March 25 (Bloomberg) -- Bank of Japan policy makers, meeting for the first time under Governor Toshihiko Fukui, decided to increase purchases of shares from banks by half to 3 trillion yen ($25 billion.) ``We made the decision because the volatility of stock markets has increased recently and we conclude that we need to boost our efforts to help banks avoid stock investment risk,'' the central bank said.
Share prices extended their declines as investors said the announcement came too late to help banks avoid losses when they close their books for the business year ending March 31. The Nikkei 225 Stock Average's more than 25 percent drop in the past year threatens to cut the capital of some banks and insurers below levels needed to stay in business. ``That is a great way to destroy credibility and investor confidence in your first few days on the job,'' said Alex Muromcew, who helps manage $600 million in stocks globally as a fund manager for Loomis Sayles & Co. in San Francisco. ``It also shows how messed up Japan is when everyone is depending on the central bank to bail out the stock market.'' The Nikkei 225 Stock Average fell 2.3 percent to 8240.69 as of 2:38 p.m. in Tokyo. Investment losses at the seven biggest banks amounted to 5.84 trillion yen as of March 7, according to Daiwa Institute of Research. //www.quote.bloomberg.com