Bank of Japan injects liquidity to reduce risk aversion

The Bank of Japan has already begun to support the Japanese recovery and help overcome the anxiety and risk aversion that is bound to result from the terrible events of the past few days. they announced that they were buying 15 trillion yen or $183.7 billion (U.S.) worth of assets for their balance sheet. this amount includes 1.5 trillion yen of government debt instruments. The assets they have acquired include corporate debt, exchange traded funds, real estate investment trusts as well as government securities.In effect they have doubled the size of the Bank of Japan’s asset purchase facility. They also continue with their program of near 0 % interest loans and expect to provide 30 trillion in 3 and six month loans at these extremely low rates of interest. Although some banking analysts would like the central bank to inject even more liquidity this is nevertheless a good move in the right direction in view of the current circumstances. In the coming months I would expect them to continue on this path .

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About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
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