Fukui's first few days are far from easy

The new governor of the Bank of Japan, Toshihiko Fukui, made the announcement - boosting the target for stock buying from 2 trillion yen to 3 trillion - after a double meeting of the BoJ's policy board.

The decision should help prop up the banks, who face the end of the financial year on 31 March with their accounts ravaged by slumping stock prices and property valuations.

But the move came from the regular board meeting, after an emergency meeting held immediately before failed to produce any special measures.

"It is perplexing why they called an extraordinary meeting and then did nothing," said Richard Jerram, chief economist for ING Securities in Tokyo.

"It is a bit of a puzzle what they were doing. Fukui is not a dumb guy."

Debt

The Bank of Japan has already spent over 1 trillion yen on share buying in just four months, as figures released on Tuesday showed.

Japan's banks hold about 25 trillion yen in shares, much from sister companies or companies to which they have loaned money.

Koizumi may face a challenge later this year

The problem is that - as the hundreds of trillions of yen in bad debts show - many of those companies are now in dire straits after the bursting of the stock market bubble and more than a decade of deflation.

Japanese voters hoped Prime Minister Junichiro Koizumi would make radical change when they elected him two years ago.

But little has happened, partly due to obstruction from members of his own Liberal Democratic Party who are in the pockets of industries which would be hit by economic reform.