BoJ to withdraw another 1.5 trillion yen from banking system

TOKYO (AFP) - The Bank of Japan announced Wednesday it would withdraw a further 1.5 trillion yen (12.8 billion dollars) in funds from the banking system following recent large injections aimed at stabilising markets.

The move came a day after Japan's central bank drained 1.6 trillion yen from the money market, the amount it had injected since Friday as part of concerted global efforts to ward off a potential credit squeeze.

A BoJ official said the central bank had decided to withdraw the additional funds after money market interest rates declined, suggesting there was ample liquidity in the Japanese banking system despite worries over US mortgages.

"There are ample, surplus funds in the market," said the official, who asked not to be named.