The government on Thursday intervened in the foreign exchange market to weaken the yen, which had hovered at near record-high levels against the U.S. dollar. In collaboration with the government, the Bank of Japan promptly took steps to ease the money supply to help the economy overcome the effects of the yen's sharp rise.
The BOJ's Policy Board was originally scheduled to meet on Thursday and Friday, but shortened the meeting to one day in an emergency move. It decided to keep the key short-term interest rate at around zero to 0.1 percent and expand the BOJ's ¥40 trillion asset purchase program to ¥50 trillion to ease credit conditions.
The Japanese economy has suffered much from the March 11 earthquake and tsunami and radiation hazards and a power shortage caused by the Fukushima nuclear accidents. A continuing surge in the yen will not only weaken Japan's competitiveness but also prompt enterprises to move their production abroad, thus hollowing out the Japanese economy.