The Bank of Japan extended the deadline for its buying of commercial paper to improve corporate funding on Thursday as it battles the credit crunch with its policy rate near zero and the economy in its deepest slump in more than three decades.
The central bank decided to keep its key policy rate unchanged at 0.10 per cent by a unanimous decision.
It extended the deadline for its buying of commercial paper until September 30th from the current date of the end of March. In a statement the BOJ said Japan's financial environment remains severe. It had previously said the severity was increasing.
BOJ Governor Masaaki Shirakawa will hold an embargoed news conference later in the day, with his comments expected to come out later today.
Japan is slipping deeper into recession with October-December showing the worst decline since the 1974 oil crisis as the global downturn slashed demand for its exports.
Analysts see more pain ahead for the economy, which has suffered a sharper contraction than other major economies due to its heavy dependence on exports and soft domestic consumption.
Many major economies contracted in the last quarter of 2008 and even powerhouses such as China are slowing hard.
Central banks around the globe have nudged down interest rates and some with little room to cut rates further have offered various debt measures to get cash into the financial system as fallout from the global credit crisis widens.
Reuters