Japan’s central bank moved to soften the effects of the earthquake, tsunami, and nuclear emergency on the country’s markets by doubling its asset purchase program and pouring record liquidity into markets, according to The Wall Street Journal. On Monday, the Bank of Japan poured ¥15 trillion into money markets to ease liquidity concerns, which is an unprecedented response. The policy board also voted to boost the bank’s purchases of risky financial assets by ¥3.5 trillion and boost government debt purchases by ¥1.5 trillion, thereby doubling the size of the central bank’s asset-purchase program to ¥10 trillion.
BOJ Governor Masaaki Shirakawa said, “What we were most concerned about was the possibility that increases in anxiety and risk-aversion moves would negatively affect the real economy,” which he said explained the focus on boosting risky asset purchases. However, some economists looking for an aggressive response from policymakers were disappointed by the size of the emergency aid. Shirakawa acknowledged that the country’s “production is likely to decline,” and warned, “Uncertainty over the economic outlook has become high.”