BOJ To Mull Expanding Collateral In Meeting This Week

TOKYO (Nikkei)--The Bank of Japan is expected to consider accepting a wider variety of collateral in its fund-supplying operations with financial institutions at its regular two-day policy board meeting, which begins Monday.

The board will likely recognize that, while economic conditions remain tough, the transition to the new fiscal year occurred without disruptions thanks to commercial paper buying operations in support of corporations. It is also expected to commit to providing large amounts of funds into the new fiscal year.

In addition, it will discuss accepting a greater range of collateral from financial institutions, such as municipal bonds, in its fund-supplying operations. The central bank currently accepts publicly offered bonds, but may expand that to municipal bonds that are privately placed with certain institutions.

Due to concerns that the financial markets will be rattled when corporate earnings start to be released at the end of April, the board could also consider stepped-up measures to support firms.

(The Nikkei April 6 morning edition)