Responding to the government's call for deflation-fighting steps, the Bank of Japan said Wednesday it will expand liquidity by doubling its three-month loans to banks, introduced in December, to about ¥20 trillion.
The central bank also announced it will keep the benchmark interest rate at 0.1 percent, the level it has maintained since December 2008. The BOJ's additional monetary easing aims to encourage a decline in loan interest rates by injecting more money into the financial system.
Under the funding program, the central bank has been extending to financial institutions three-month loans at a fixed interest rate of 0.1 percent against such collateral as government and corporate bonds.