THE Bank of Japan added 1 trillion yen (US$9.44 billion) to the financial system yesterday in its seventh day of fund injections to help ease a global credit crunch.

Japan's overnight call loan rate was at 0.40 percent after the operation yesterday in Tokyo, falling from 0.65 percent, according to Tokyo Tanshi Co.

Short-term rates on yen loans rose to a two-month high as domestic banks charged non-Japanese lenders the highest overnight borrowing costs since February, Bloomberg News reported.

"Cash is king," said Tomohiko Katsu, a deputy general manager of capital markets at Shinsei Bank Ltd in Tokyo. "Domestic bankers and foreign bankers are finding it hard to find funding, so the BOJ has to continue providing money," he said.

The BOJ has pumped 15 trillion yen into the system over the past week, as other central banks poured cash into money markets after the collapse of Lehman Brothers Holdings Inc. United States President George W. Bush said a US$700-billion rescue plan was needed to avert "a long and painful" recession.