Bank of Japan injects 23 billion dollars to dodge crisis

Bank of JapanTokyo - Japan's central bank on Tuesday pumped 2.5 trillion yen (23.65 billion dollars) into money markets to ease the impact of the failure of the US investment bank Lehman Brothers Holdings Inc.

"The Bank of Japan will carefully monitor the recent developments among US financial institutions and continue to try to secure smooth fund settlements and financial-market stability by implementing appropriate money-market operations," Governor Masaaki Shirakawa said in a statement.

The bank's policy board began a two-day meeting Tuesday, and it was expected to maintain its key short-term interest rate at 0.5 per cent after discussing the financial market turmoil caused by the biggest bankruptcy filed in history by the fourth-largest US securities house.

Japanese Finance Minister Bunmei Ibuki said, however, that the US crisis would only have limited negative effects for the Japanese financial system and serious damage could be avoided.

"Considering the conditions of each financial institution's self-owned capital, we do not have to worry about the Japanese financial system though those entities have extended loans to Lehman," Ibuki said at a press conference.

At least seven Japanese banks lent a total of 1.67 billion dollars to the US firm.

Chuo Mitsui Trust Holdings Inc said its banking unit's exposure to Lehman Brothers totalled 15 billion yen while Mizuho Trust and Banking Co reported 11.8 billion yen in outstanding loans and bonds from the US firm.

Lehman's Japanese unit on Tuesday also filed for bankruptcy protection with the Tokyo District Court, which became the second-largest corporate failure in terms of debts in postwar Japan, the Kyodo News Agency said. (dpa)

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