04 September 2012, the central bank is injecting massive amounts of cash into the markets, trying to preemptively hold off a market crash!  This after the central government said it can no longer make tax grant payments to local governments!

The government of Japan announced early this morning that it can not make scheduled tax grant payments to local governments.  The payments amount to $52 billion USD.

The Bank of Japan responded by injecting $23 billion USD of cash into Japanese financial institutions.  This is to try and offset the loss of the central government’s tax grants.

Local governments normally transfer the tax grants into those financial institutions, but officials with the central government of Japan said that until a bill is passed to allow the issuing of more government bonds, they can not make the tax grant payments to local governments.

The bond bill is needed to raise at least 2/5-ths of the money required to run the central government for the next year.