Ensuring stability in financial markets Second, the Bank has been making efforts to ensure stability in financial marketsin order to maintain the smooth conduct of economic and financial activities in Japan.
While the Bank reviewed the temporary measures from this perspective, it goes without saying that one of the Bank's most important purposes is ensuring stability in financial markets.
Based on the above assessment of the economic and financial situations, the Bank thought it appropriate to raise the target balance of current accounts held at the Bank in order to show its determination to ensure financial market stability.
The Bank of Japan has adopted quantitative easing since March 2001. This policy contributes to ensuring financial market stability and maintaining the accommodative environment for corporate finance, thereby firmly supporting the real economy.
To this end, the Bank will continue to consistently make the utmost contributions as a central bank with a focus on the three points that I have just mentioned: pursuing powerful monetary easing, ensuring financial market stability, and supporting efforts to strengthen the foundations for economic growth.
Based on the above described uncertainty regarding the economic and financial situation, the Bank thought it appropriate to raise the target balance of current accounts held at the Bank to maintain financial market stability, thereby strengthening support for economic recovery.
The Bank of Japan is closely monitoring how the military action will affect the economy, especially through stock and foreign exchange markets, and stands ready to make every effort, including the additional provision of liquidity, to ensure financial market stability see Attachment 2.
The Bank, in addition to lowering its target for the uncollateralized overnight call rate to 0.1 percent, provided ample liquidity by actively conducting funds-supplying operations and increasing the amount of outright purchases of Japanese government bonds(JGBs) in order to ensure the stability of financial markets.
Based on that recognition, the Bank has been making utmost contributions as a central bank through vigorous policy responses based on the three-pronged approach of pursuing powerful monetary easing, ensuring stability in financial markets, and providing support in strengthening the foundations for economic growth.
Until the previous meeting, Ms. Shinotsuka's proposal had included the following sentence:"Regardless of the above target for the call rate, the Bank of Japan will provide more ample funds, if judged necessary, to maintain thestability of the financial markets.
In financial markets in many emerging economies, stock prices rose and the yield differentials between their sovereign bonds and U.S. Treasuries narrowed, supported mainly by financial market stability in industrial countries, such as the United States, and the favorable economic fundamentals.
These members expressed the view that, given the large fluctuations in liquidity demand, the stability of financial markets was likely to be impaired if the Bank conducted market operations aiming at a specific target for the outstanding balance of current accounts at the Bank.
I as the Governor of the Bank released a statement on the following morning(September 12) before the opening of the Tokyo market, in order to make clear the Bank's firm commitment that it would make every effort in order to ensure smooth funds settlement and the stability of financial markets.
Providing ample liquidity towards the end of a fiscal year For the time being, to secure the financial market stability towards the end of a fiscal year, the Bank will provide more liquidity to meet a surge in demand irrespective of the target of current account balances, around 10 to 15 trillion yen attachment.
With a view to overcoming deflation and returning the Japanese economy to a sustainable growth path with price stability, the Bank continues to consistently make contributions as the central bank and is currently utilizing a three-pronged approach of pursuing powerful monetary easing through comprehensive monetary easing, ensuring financial market stability, and providing support to strengthen the foundations for economic growth.
In order for Japan's economy to overcome deflation and return to a sustainable growth path with price stability, the Bank has continued to consistently make contributions as the central bank through the three-pronged approach of pursuing powerful monetary easing consisting of comprehensive monetary easing, ensuring financial market stability, and providing support to strengthen the foundations for economic growth.
The Bank has engaged in a wide range of efforts-- from implementing the zero interest rate policy and the quantitative easing policy, to pursuing monetary easing consisting of comprehensive monetary easing, ensuring financial market stability, and providing support to strengthen the foundations for economic growth in more recent years-- but fallen short of overcoming deflation.
In addition to the measures in three main areas, namely, reducing the policy interest rate, ensuring stability in financial markets by providing ample liquidity, and facilitating corporate financing, the Bank resumed purchasing stocks held by banks to secure stability in the financial system and has provided subordinated loans to banks.
This morning, the Bank conducted a same-day funds-supplying operation totaling 7 trillion yen, which was the largest amount ever conducted, and a future-day-start funds-supplying operation totaling 3 trillion yen. The Bank will do its utmost to continue ensuring stability in the financial markets and securing smooth settlement of funds, including providing liquidity.
Examination of Possible Purchase of Asset-Backed Securities: 日本銀行 Bank of Japan April 8, 2003 Bank of Japan Ample liquidity provision by the Bank of Japan has made a significant contribution to securing financial market stability and upholding the economy and prices. For the ample liquidity provision to effectively lead to economic expansion, however, it is deemed necessary to strengthen the transmission mechanism of monetary easing.
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