Japan joins efforts to stabilise markets

Japan’s central bank decided today to restart a temporary dollar-swap agreement with the US Federal Reserve, as part of a global effort to stabilise financial markets roiled by the European debt crisis.

At an unscheduled monetary policy meeting, board members also voted unanimously to keep its key interest rate at 0.1%.

The Bank of Japan’s decision follows a move by the Federal Reserve to ship US dollars overseas to limit fallout from Greece’s debt problems.

Other central banks, including the Bank of Canada, the Bank of England, the European Central Bank, the Swiss National Bank also are reportedly involved in the dollar swap effort.

The coordinated moves are designed to ease liquidity strains in US dollar short-term funding markets in Europe, the Bank of Japan said.

“The Bank will continue to strive to maintain financial market stability through proper implementation of money market operations,” it said in a statement.