Business

Bank of Japan pumps six trillion yen ($76 billion) into financial system to soothe markets

TOKYO — The Bank of Japan on Thursday pumped six trillion yen ($76 billion) into the financial system to soothe money markets shaken by Japan’s biggest ever earthquake, a devastating tsunami and a nuclear emergency.

The central bank pumped five trillion yen (US$63bn) into the financial system early Thursday, followed by an injection of another one trillion yen (US$13bn) in the afternoon.

The move raised its total funds injection in short-term money markets since Monday to 34 trillion yen (US$434 billion), following an earlier pledge to provide “massive” funds following the disasters.

The bank also offered Thursday to buy a total of 3.86 trillion yen (US$49 billion) worth of government bonds and short-term securities next week to add extra liquidity.

The central bank’s priority is to ensure that financial institutions in disaster-hit regions do not run out of funds.

In early Thursday trading, the benchmark Nikkei index plunged more than four percent as jittery investors again offloaded shares amid fears about the unfolding crisis at the Fukushima nuclear plant.

Tokyo shares closed down 1.44 percent after the yen retreated from an earlier record high set against the dollar, easing worries about the outlook for exports.

Finance chiefs from the G-7 rich nations were set to hold telephone talks on the crisis on Friday Tokyo time, as market talk grew that Tokyo might be preparing measures to rein in the soaring yen.

Asian stocks resumed their downward track Thursday as Hong Kong fell 1.79 percent by the break, Sydney lost 0.10 percent and Seoul slid 0.66 percent.

Shanghai was 0.51 percent off, with nuclear energy firms hit by news that China’s government had suspended approval of new projects in response to the Japan crisis.

Corporate giants on the Nikkei were being sold off, with Toyota down 4.9 percent, Sony sliding 4.9 percent and Canon off 6.3 percent.

Tokyo Electric Power (TEPCO), operator of the troubled nuclear power facility, tumbled 22 percent after slumping around 25 percent on each of the past three days, leaving it at about one-third of its value before the disaster struck. They closed the day down 13.35 percent.

On oil markets New York’s main contract, light sweet crude for delivery in April, lost 37 cents to $97.61 per barrel while Brent North Sea crude for May was down 53 cents at $110.07.

Gold slipped as dealers cashed in the precious metal, opening at $1,390.00-$1,391.00 an ounce in Hong Kong, down from Wednesday’s close of $1,400.00-$1,401.00.