Highlights: Japan boosts FX monitoring

TOKYO (Reuters) - Japan's government on Wednesday unveiled a $100 billion credit line to prompt companies to invest overseas and said it would boost monitoring of financial institutions' currency positions, in a package of steps to deal with the yen's strength.

Following are details of the package:

FX MONITORING

-- Financial firms, mainly banks, will be required to report foreign exchange positions covering major currencies daily, probably twice a day. These positions will not be made public.

-- The step to strengthen monitoring of speculative moves in the forex market will be in place until the end of September. The Ministry of Finance (MOF) wants to launch it as soon as preparations are finished.

-- The MOF did not clarify whether the results of monitoring could lead to any action against financial institutions. Finance Minister Yoshihiko Noda only said that this would depend on the outcome and that the initial goal was to gain more information about markets.

-- Banks and securities firms that have dealings in Tokyo markets will be required to comply. A MOF official said slightly over 30 firms that already make quarterly reports on the value of dollar-yen and other currency trades worth $5 billion or more could be targeted.

-- The official said other G7 nations probably do not have such reporting requirements, though other countries do conduct hearings with market participants.

-- The step is based on Japan's foreign exchange law. It marks the first time the government has made reporting on forex positions compulsory since the law was revised in 1998. The previous law obliged regular reporting on currency positions.

CREDIT LINE

-- Of the $100 billion total, half is envisioned for use in overseas mergers and acquisitions and the rest for purchases of resources from abroad, to prompt conversion of yen funds to foreign currencies to help market stability.

-- The government will provide dollar funds by tapping a special account that manages the country's $1.1 trillion foreign reserves and other foreign currency assets.

-- It will lend these funds to Japan Bank for International Cooperation (JBIC) at six-month LIBOR. JBIC will in turn extend loans jointly with Japanese banks, in a bid to promote private-sector investments overseas.

-- JBIC will also set up funds with banks to lend to small firms to help expand their exports and overseas projects. Five 20-billion-yen joint funds are eyed.

-- The credit line will be in place for a year.

(Reporting by Rie Ishiguro; Editing by Joseph Radford)