The Bank of Japan has decided to ease monetary policy again and pump more money into the world's second largest economy amid heightened risks to growth. The increase in the value of the yen, economic uncertainty in the US and Europe, and the outbreak of SARS in Asia have all added to pressure on the Japanese economy. Over the weekend, the government was forced to bail out Resona, the country's fifth largest bank after a shortfall in its capital levels.
The bank's policy board agreed by majority vote at its meeting today to raise the target for current accounts held at the bank to around 27-30 trillion yen from 22-27 trillion previously. "Economic activity in Japan remains flat but uncertainties about future prospects have recently been increasing," the bank said in a statement. "In addition to uncertainties arising from the prospect of a recovery in the US and European economies, as well as the impact of SARS on East Asian economies, unstable stock and foreign exchange markets overshadow future prospects." //www.fxcentre.com