Corporate foreign exchange news
Foreign exchange news: BoJ reassures markets over rates
Wednesday, 04 November 2009 08:40:41 GMT

The governor of the Bank of Japan (BoJ) has reassured markets the central bank will keep interest rates low despite an easing of downside risks.Speaking to a forum in Tokyo attended by Reuters, Masaaki Shirakawa also debunked claims that its decision to wind down the commercial paper and corporate bond purchase programme was the first move in tightening economic policy.The government has expressed opposition to the cessation of the policy, but the central bank was insistent that credit conditions had improved significantly enough to remove the programme, which in any event had not been widely utilised.He insisted that monetary conditions will remain "very accommodative"."This is a separate issue from how, through monetary policy, to deal with balance sheet adjustments and ensuing weakness in economic recovery," he declared.Yasunari Ueno, chief market economist at Mizuho Securities, said that the statements should be taken as a sign that the BoJ is drawing a line between maintaining low rates and reviewing its levels of support for corporate finance.

