BOJ eases policy to shore up confidence, pumps cash - Reuters

(Reuters) - Japan's central bank doubled its asset buying scheme to 10 trillion yen and supplied record funds to banks on Monday to shore up confidence in the economy hit by a triple blow of a massive quake, a tsunami and a nuclear emergency.

The Bank of Japan said its action was a pre-emptive step after markets swooned at the shock of Friday's 8.9 magnitude earthquake and a tsunami that may have killed more than 10,000 and has left millions without power, water or homes.

The central bank said it was still sticking to its view that the world's third largest economy would resume its moderate recovery, though it warned about a likely drop in economic output and vowed to do whatever necessary to limit the economic fallout.

"This time's earthquake has inflicted damage in a wide area. Output is likely to fall for some time. We are also worried that corporate and household sentiment will worsen," the BOJ said in a statement after its board voted 8 to 1 to expand its 5 trillion fund pool put in place last October to support Japan's recovery after the global economic crisis.

In an unanimous vote the board also kept, as expected, its benchmark rate at 0-0.1 percent.

While the fund increase came as a surprise to some economists, some said the central bank could have done more. more ...