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BOJ injects liquidity, banks' account balance at 5-month high.

TOKYO, Sept. 30 Kyodo

The Bank of Japan injected liquidity into the banking system Monday, bringing the outstanding balance of financial institutions' checking accounts at the BOJ up to a five-month high of 18.2 trillion yen.

The balance is about 3 trillion yen above last Friday's level, reflecting the central bank's resolve to meet seasonal cash demand at the end of fiscal first-half for Japanese banks and many Japanese corporations.

Under its so-called quantitative monetary easing policy, the BOJ used to keep the balance of checking accounts at 10-15 trillion yen but has said it would raise the target if necessary.

On the money market, the benchmark unsecured overnight call rate was briefly quoted at 0.15-0.20% by some banks, a level above the official discount rate that is now 0.1% per year.

But the rate fell to 0.067% on a weighted average basis late Monday against Friday's weighted average of 0.002% after the BOJ injected 500 billion yen into the banking system via an afternoon bill-buying operation for same-day settlements.
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Publication:Japan Weekly Monitor
Date:Oct 7, 2002
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