Central bank rejects proposal for further easing By Lisa Twaronite, MarketWatch TOKYO (MarketWatch) — The Bank of Japan on Thursday held policy steady, rejected a proposal to increase the size of its asset-buying program and detailed a lending program for banks in disaster-struck areas. The central bank said that Deputy Gov. Kiyohiko Nishimura proposed increasing the size of the central bank’s asset-purchase program by 5 trillion yen ($61 billion) to ¥15 trillion from the current ¥10 trillion. Nishimura’s proposal was rejected by majority vote, the bank said in a statement. The central bank kept its overnight call rate range at zero to 0.1% by unanimous vote, and also broadened the range of assets it accepts as collateral from banks in regions hit by the March 11 earthquake and tsunami. It said it will accept collateral from companies rated BBB or higher, compared to its former requirement of A or higher. It also released the details of the emergency ¥1 trillion loan program to help support disaster-struck areas. Participating banks in disaster zones can take out one-year loans of up to ¥150 billion at 0.1%, with applications due by the end of October. Data released earlier Thursday underscored the extent to which the disaster hurt Japan’s economy. Industrial production fell 15.3% in March from February, the biggest drop ever recorded. Read more on Japan economic data.

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