Bank of Japan to pump cash into banks

By Chris Isidore, senior writer


NEW YORK (CNNMoney) -- Japanese officials said Sunday they will backstop the country's financial system when markets reopen after Friday's devastating earthquake and tsunami.

The Bank of Japan, in a statement, said it would monitor financial markets and the operation of banks and "stand ready to respond and act as necessary."

The head of the Japanese Central Bank, Masaaki Shirakawa, told reporters that the Bank of Japan stood ready to "provide markets with a lot of liquidity first thing tomorrow morning," according to numerous news reports.

The aim is to make sure the banks have enough cash on hand to meet demands of panicky investors and cover withdrawal demands of bank customers.

Officials will rigidly monitor the markets to prevent any transactions by people trying take advantage of the disaster, Japanese Minister for Financial Services Shozaburo Jimi said Sunday. Specifically, the ministry will ban so-called naked short selling, which can cause a run on stocks.

The earthquake hit off the coast of Japan, several hundred miles from Tokyo, just before the close of trading in Japanese markets on Friday afternoon. The benchmark Nikkei 225 stock index dropped just over 100 points, or 1%, in the final minutes of trading and ended the day 1.7% lower.

Trading in stock futures, which tend to predict future stock movements, suggest that stocks will fall when markets open for trading on Monday.

Friday's earthquake -- the most powerful to hit Japan in at least 100 years -- unleashed walls of water that caused widespread damage. By official counts, more than 1,500 people have died and about that many are missing, though fears remain that the toll could go much higher. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.85%3.94%
15 yr fixed3.03%3.04%
5/1 ARM3.49%3.50%
30 yr refi3.93%3.99%
15 yr refi3.12%3.13%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 18,288.63 155.93 0.86%
Nasdaq 5,008.10 44.57 0.90%
S&P 500 2,117.39 12.89 0.61%
Treasuries 2.08 0.08 4.10%
Data as of 4:59am ET
Company Price Change % Change
Apple Inc 129.09 0.63 0.49%
Cisco Systems Inc 30.19 0.68 2.30%
Microsoft Corp 43.88 0.03 0.07%
Intel Corp 34.06 0.81 2.44%
Staples Inc 17.02 0.25 1.49%
Data as of Mar 2
Sponsors

Sections

Guinness owner says inclusion of an LGBT group in this year's parade is reason to resume its sponsorship, though some gay rights groups are still protesting the parade's policies. More

The Stratos Card is a new Bluetooth-connected device that wants to make all of your credit cards, debit cards, loyalty cards, and gift cards obsolete. More

Last week, the House of Representatives passed a bill that would expand benefits offered by the college savings plans to include coverage of expenses like computers and Internet access, among other things. And there is bipartisan support for it in the Senate, too. More