BoJ’s Miyao pledges continuity of settlements system during planned blackouts

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Back-up power generators at central bank branches across the country will ensure the smooth functioning of its cash settlement systems ahead of planned blackouts, Ryuzo Miyao, a member of the Bank of Japan's Policy Board, has said.

"In response to the subsequent planned power outage on concerns over power supply shortages, the [Bank of Japan] has been taking all possible measures to stem an interruption in the settlement of funds, partly by continuing its business using in-house power generation at some branches," Miyao told Japanese business leaders in Oita, Japan, on Wednesday.

Miyao said the Bank of Japan Financial Network System (BOJ-Net), the cornerstone of Japan's settlement system infrastructure, had a stable power supply and would continue to function normally ahead of planned power shortages. He said some financial institutions had reported troubles with settlements systems in the aftermath of the earthquake and that a disaster management team was striving to ensure its operation.

The Tohoko earthquake, which struck on March 11 and measured 8.9 on the Richter scale, devastated large areas of Japan's north-east coast, prompting a vast relief effort, including the injection of ¥7 trillion ($85.4 billion) by the Bank of Japan. However, explosions at a nuclear power plant in Fukushima has further complicated the recovery efforts, with planned power cuts expected in a bid to preserve the country's limited energy resources.

BOJ-Net is an interbank clearing system owned by the Bank of Japan that allows real-time settlement of payments to the private sector. In 2009, the Bank of Japan added further features to the system infrastructure to enhance its safety and the efficiency of its settlement services.

Miyao said the central bank would also continue to distribute cash to earthquake-stricken regions. "Financial institutions have been making strenuous efforts to combat the situation by utilising their undamaged branches and/or making deposit withdrawals through operations on weekends and holidays," Miyao said. He said the central bank had opened on weekends to provide cash through its branches, with ¥55 billion yen ($677m) issued in the Tohoku region amounting on March 12 and March 13, and a further ¥256 billion yen during March 14 to March 18.

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