On Sunday Japanese officials stated that they will backstop the financial system once the markets reopen after Friday’s devastating events. The Bank of Japan also stated that it will monitor these markets and the operation of backs in order to “respond and act as necessary.” Masaaki Shirakawa, head of the Japanese Central Bank, also mentioned that the Bank was ready to contribute “liquidity” to markets tomorrow morning. The goal of these actions is to guarantee that banks have enough available cash to satisfy worried investors, as well as customers withdrawing money.
Moreover, according to the Japanese Minister of Financial Services, Shozaburo Jimi, officials will also monitor the markets in order to prevent transactions by individuals who may attempt to take advantage of the situation. Therefore, naked short selling will be banned by the ministry.
The earthquake hit the nation just before the Japanese trading markets closed on Friday, causing the Nikkei 225 stock index to drop by 100 points. By the end of the day the stock had dropped by 1.7%. When trading markets open on Monday it is predicted that stocks will continue to fall.
By Aleksandra Ruseva
http://money.cnn.com/2011/03/13/news/international/bank_of_japan_earthquake/?npt=NP1
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