BOJ eyes buying corporate debt with lower ratings+

TOKYO, Oct. 27 Kyodo -
The Bank of Japan is considering purchasing corporate debt with relatively
lower credit ratings under the central bank's emergency program to support the
funding of companies and bolster the faltering economy, sources close to the
matter said Wednesday.
The BOJ could set the minimum ratings for the purchases at triple B for
corporate bonds and a-2 for commercial paper, or short-term debt issued by
companies, the sources said. The levels are lower than the ratings set last
year when the bank temporarily introduced similar programs amid the global
financial turmoil.
The BOJ is now examining newly establishing a 5 trillion yen ($61.23 billion)
program to buy financial assets ranging from government and corporate bonds to
exchange-traded funds and real estate investment funds, in addition to its 30
trillion yen lending operation that offers three- and six-month money against
collateral at interest rates as low as 0.1 percent.
It would purchase the assets from commercial banks and other financial
institutions in order to help drive lower long-term interest rates as well as
the interest rate premiums of private-sector debt over government bonds.
Details of the program could be announced Thursday after the BOJ holds a policy
meeting, in which the bank is widely expected to maintain its key interest rate
in a range of around zero to 0.1 percent.
It will also release its semiannual outlook report for the Japanese economy.
The BOJ is highly likely to downgrade its earlier forecasts for the nation's
economic growth and inflation, and confirm that the return of the economy to a
sustainable growth path will be delayed amid deflation.
==Kyodo