[A-List] US Imperialism: BOJ supports the dollar

["annewilliamson" <annewilliamson@xxxxxxx>]

What a surprise!  The BOJ doesn't like a falling dollar. -A.

Japan readies stock, intervention plan - Nikkei

NEW YORK, March 12 (Reuters) - The Japanese government is expected on
Thursday to announce a market stabilization plan that expands official stock
purchases and asks for joint intervention in the currency market, the Nihon
Keizai Shimbun newspaper reported on Wednesday.
The Nikkei reported that Japan's Financial Services Agency will unveil a
six-point plan to support stock prices, including calls on financial
institutions to give consideration to market trends before selling their
shareholdings.

The Nikkei report, monitored in New York, said Japan would announce its
intention to call on U.S. and European monetary authorities to conduct
large-scale, joint market interventions in the foreign exchange markets to
support the dollar should it drop sharply following any U.S. military attack
on Iraq.

Earlier on Wednesday, the FSA denied it had any plans to announce a package
of measures on Thursday even though Finance Minister Masajuro Shiokawa had
already said one was imminent.

A plunge in Tokyo stocks and escalating tensions over Iraq this week sent
policy-makers scrambling to devise stock price support measures prior to
March 31 corporate book-closings.

High-ranking officials from the Ministry of Finance, the FSA and the BOJ
attended an emergency meeting on Wednesday where they agreed that measures
to stabilize the foreign exchange and stock markets are crucial to stave off
a possible financial crisis, the Nikkei said.

Following the meeting, the FSA started devising price support measures, the
report said.

The Nikkei report said the FSA will ask the BOJ to raise the 2 trillion yen
ceiling on the amount of shares that it can buy from commercial banks.

The BOJ plans to buy up to 2 trillion yen worth of shares from commercial
banks by the end of September, with the amount of its share purchases
expected to top 1 trillion yen at the end of March, which is the end of
Japan's financial year.

The government considers it necessary for the BOJ to raise the upper limit
as a way to absorb shares unloaded by banks more smoothly, the Nikkei said.

Some in the MOF and the FSA argue that the ceiling should be raised to 4
trillion yen in order to ease selling pressure, but the BOJ is sounding a
cautious note about this idea due to fears about the deterioration of its
own assets, the report said.

The price-supporting measures will include regulations on share-lending
practices, which lead to a huge amount of sell orders, the Nikkei said.

The FSA will also encourage companies to buy back their own shares by
relaxing the relevant rules, hoping to boost the trading volume in the stock
market.

As for fiscal policy, the government is considering no specific measures
other than the front-loading of public works projects in the first half of
fiscal 2003. But the government will consider additional measures if the
U.S. actually goes to war with Iraq, the Nikkei reported.


 http://reuters.com/financeNewsArticle.jhtml?storyID=2370210&type=bondsNews