Japan's central bank eased monetary policytoday for the first time since the end of February, hours beforethe government was due to unveil measures to tackle massive badloans at banks.
Analysts said the widely expected move was a symbolic responseto efforts by Prime Minister Junichiro Koizumi to revive theeconomy, and would be largely ineffective because the financialsystem was already flush with cash.
The BoJ increased monthly purchases of government bonds by afifth and boosted the level of targeted reserves in its currentaccount by up to a third.
Many observers had hoped for more aggressive action after thecentral bank announced a radical plan last month to buy equitiesfrom banks to protect them from sharp stockmarket swings.
Investors were uncertain what to expect from Japan's chieffinancial regulator and economic czar, Mr Heizo Takenaka, who has beenholding talks with bankers and ruling party figures in recent daysto reach a compromise deal.
Markets moved cautiously before the government's policy newswith the Nikkei-225 average of the Tokyo Stock Exchange ending theday up 0.5 per cent or 47.83 points at 8,756.59.
AFP