On top of the $265bn being made available to banks, the Bank of Japan has decided to double its asset purchase scheme to $122bn (¥10,000bn). The decision was made at the Bank’s scheduled monetary policy meeting, at which rates were kept at 0-0.1 per cent.
Of the $265bn (¥21,800bn) being made available to financial institutions, $182.3bn (¥15,000) is available immediately, and $82.6 (¥6,800) over the coming days.
The Bank’s current Asset Purchase Programme is subject to a ceiling of $427bn (¥35,000bn). This splits into a maximum of $366bn (¥30,000bn) in loans, and a maximum of $61bn (¥5,000bn) stock of outstanding financial assets. It is this latter limit that is to be doubled to $122bn (¥10,000bn), effective today, with assets being bought by the end of June 2012.
Specific details are as follows:
Richard Fisher, president of the Dallas Fed, has made a speech today which sets out where he stands on the question of further monetary easing. Mr Fisher will be a voting member of the FOMC next year.
A few quotes:
On the price front, I am known as an inflation hawk. I am comfortable with that description.
But it is clear that inflation is not the immediate problem facing the nation. As pointed out by the chairman, inflation has declined to a level that is at the low end of the 1.5 to 2 percent range that the participants in FOMC deliberations consider conducive for healthy economic growth over the long run.
Easing, not tightening, in the US.
Life just got a little easier for some small depositary banks. Rather quietly, the Fed’s board of governors reduced the seasonal discount rate to 0.3 from 0.35 per cent on July 15, reversing the rising trend prevailing since November.