MNI POLICY: BOJ to Conduct Ops More Flexibly Before End-FY

     TOKYO (MNI) - The Bank of Japan said Friday it would inject liquidity into

financial markets in a more flexible manner ahead of the end of the March 31

fiscal year end, the BOJ's Financial Markets Department said.

     "Considering the recent unstable movements in global financial and capital

markets, the BOJ has decided to implement the following measures in order to

ensure stability in financial markets toward the end of this March," the BOJ

said.

     The BOJ noted it had "conducted unscheduled outright purchase of Japanese

government bonds today, which was not scheduled beforehand. The BOJ will

continue to conduct additional outright purchase of JGBs as needed, taking

account of market conditions", also announcing measures to maintain stability of

the repo market.

     In order to ensure stability in the market by easing excessive tightening

in supply and demand of JGSs in the repo market toward the end of this March,

the BOJ will implement the following temporary measures.

     "Increasing number of issues of JGSs offered in the Securities Lending

Facility (SLF) For the SLF to be offered between March 16 and April 3, in

principle, the Bank will offer all available JGSs held by the Bank. Meanwhile,

requests for issues of JGSs by counterparties in advance will be unnecessary,"

the BOJ said.

     It also announced it would conduct further Gensaki operations.

     "On March 25, the Bank will announce offers for sales of JGSs with

repurchase agreements, with the exercise date as March 31 and the repurchase

date as April 1. The Bank will announce additional offers for sales of JGSs with

repurchase agreements, as needed," the BOJ said.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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