BOJ may switch from QE to project funding

Tokyo

FORGET helicopter money. The Bank of Japan (BOJ) might next target financing a bit closer to the ground - trains, hospitals, power plants and sewers.

That's the view of some analysts who say the central bank may start buying bonds of local governments and public corporations that fund such projects after its Sept 20-21 meeting. That would stop short of direct financing of fiscal spending.

The average yield on notes from the nation's prefectures, cities and towns has dropped 19 basis points to 0.09 per cent since th…