Japan tries again to ease the pain

THE Bank of Japan has made another desperate attempt to kick-start its flagging economy by announcing it is relaxing further its ultra-loose monetary policy.

Caving in to intense pressure from Japan's rulers, the central bank said it would increase its monthly purchases of long-term Japanese government bonds from 800bn yen (£4.2bn) to one trillion yen, in a move akin to printing more money. It also announced steps to help banks cope with funding pressures at their financial year-end next month.

Both moves are designed to boost liquidity in financial markets, in a similar way to a cut in interest rates. Japan's rates are already effectively at zero after aggressive policy-loosening last year.

Singapore, meanwhile, admitted it suffered its worst-ever recession last year. The economy shrank 2% - the sharpest decline since independence in 1965. The export-driven economy has been especially hard-hit by the global economic downturn.