BANK OF JAPAN BUYS 200 BILLION YEN OF BILLS
The Bank of Japan reassured a nervous money
market after the sharp fall in Tokyo stock prices yesterday by
conducting a 200 billion yen commercial bill purchase
operation, money traders said.
    The central bank injected funds through three-month
repurchase agreements which mature on January 11 and bear
interest of 3.9375 pct, identical to this morning's rates on
three-month commercial bills.
    The operation was done partly to roll over 300 billion yen
in commercial bills maturing this morning. Money market sources
project a 260 billion yen surplus today.
    In the bond market, the Bank of Japan offered to buy around
50 billion yen of 10-year government bonds, encouraging an
already firm tone in bond prices, dealers said.
    The Bank of Japan was trying to reassure market
participants that it was ready to supply funds whenever the
market needed them, especially after Tuesday's plunge in Tokyo
stock prices, securities house traders said.
    The widely held market belief that interest rates were
heading higher was a major cause of the recent tumble in bond
market prices and one reason behind the stock market plunge,
they said.
 REUTER
