BoJ holds rates and plans ¥1bn bond spree

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The Independent Online

The Bank of Japan yesterday moved to boost the economy by holding interest rates at 0.1 per cent and pledging to buy ¥1 trillion worth of corporate bonds.

Masaaki Shirakawa, the governor of the Japanese central bank, said: "The functioning of corporate bond market has been weakened significantly," adding that spreads had risen and companies with low credit ratings were struggling to issue bonds. Japan fell into recession in November, ending the longest run of growth since the Second World War. Falling exports have hit its biggest companies and its output gap is at almost seven-year lows.