Bank of Japan offers unlimited free credit

Today the Bank of Japan has announced that it will offer what is deemed to be unlimited free credit in order to increase the liquidity in the money markets in order to reduce the borrowing costs around the world.

The measure is an attempt to improve companies cash flow and to increase the range of Japanese government bonds it buys from lenders.

The cash supply comes from an agreement with the US Federal Reserve last month to swap as much as $120 billion for yen.

The move is in line with the actions of other European governments, and the Federal Reserve have announced that the move is likely to be a positive one for the country and is an answer to the action called on by Nouriel Roubini, a New York University professor of economics, who predicted the financial crisis back in 2006.

Currently the bank of Japan has more than US$950 billion foreign exchange reserves which means that they are strong players in the control and destiny of the world economy as well as having a huge influence on the financial services industry.

The ruling party lawmaker Kotaro Tamura said this is a big chance for Japan and that as a result the US should be both ‘grateful and indebted’ for it is a glimmer of hope after the week where there was a 20 percent slide in the MSCI World Index.

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