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BOJ to buy shares from November 29
TOKYO, Japan -- The Bank of Japan (BOJ) said on Monday that it will start its plan to buy stocks from commercial banks on November 29. The central bank shocked financial markets by announcing in September that it would buy stocks directly from banks in order to reduce their vulnerability to stock market fluctuations and stabilize the financial system. The stock-buying scheme is not aimed at providing liquidity to the money markets, the BOJ has said. The BOJ said in October that it would aim to purchase about two trillion yen ($16.6 billion) worth of shares from banks up to the end of September 2003. But the move comes as the Japanese stock market is near 19-year lows, with the Nikkei 225 average closing 1.85 percent lower on Monday at 8,346.01. It finished just above last Thursday's close of 8,303.39, the lowest finish for the Nikkei since April 1983. Big banks down againBig banks again took a tumble, with UFJ Holdings down 8.3 percent to a fresh record low of 99,000 yen and Mizuho Holdings dropping 11.2 percent to 119,000 yen. The two other members of the big four banks, Sumitomo Mitsui and Mitsubishi Tokyo, lost about 3 percent each. The BOJ's decision came as the Financial System Council on Monday approved the banking reform plan unveiled by Economics and Financial Services Minister Heizo Takenaka on October 30. The plan, widely criticized as being not tough enough on banks, is aimed at forcing them to take action on their non-performing loans. Japanese banks have an estimated $420 billion in problem loans on their books. Reuters contributed to this report.
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