The Bank of Japan's Policy Board agreed that pressure on global financial markets stemming from the eurozone debt crisis may be prolonged when it met Nov. 30 to decide with other major central banks to help European financial institutions raise dollar funds, the minutes from last month's meeting show.
"They shared the view that, considering the difficulty of solving the sovereign debt problems in Europe, it was likely that pressures in the markets would persist over a protracted period," according to the minutes, which were released Tuesday.
The Policy Board members also thought they couldn't rule out the possibility that Japan's financial system would be adversely affected if the situation deteriorates.
While the policymakers agreed that Japanese financial institutions were not facing difficulty with funding currencies, a few members called for the need to "take great care" in communicating with markets so that the announcement of the coordinated action would not arouse "unnecessary suspicions" regarding foreign currency funding conditions, it said.
On Nov. 30, the U.S. Federal Reserve, the European Central Bank, the Bank of England, the BOJ, the Bank of Canada and the Swiss National Bank said they would step up collaboration in supplying dollar liquidity, which can easily evaporate in times of crisis.