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Business has dried up for many small firms Photo: AFP
business

BOJ expands loan program for small firms by ¥30 trillion

12 Comments
By Behrouz Mehri

Japan's central bank on Friday offered 30 trillion yen in additional lending to help small firms in the world's third-largest economy struggling with the economic devastation wrought by coronavirus.

The Bank of Japan expanded its loan program by 30 trillion yen ($279 billion), bringing its total package of financial assistance to small and medium-sized firms to 75 trillion yen.

At an unscheduled meeting held to discuss the economic ramifications of the pandemic, the bank also extended the duration of the program by six months until March 2021.

Japan was struggling from the effects of natural disasters and a hike in consumption tax even before the pandemic crippled the global economy.

Data published on Monday showed Japan had dived into its first recession since 2015 in the first quarter, with most economists warning the worst was still to come.

Adding to the Bank of Japan's headaches, the country slipped back into deflation for the first time in more than three years, with prices falling 0.2 percent in April, according to data released earlier Friday.

The central bank aims to keep the inflation rate at around two percent but did not take any monetary policy action at Friday's exceptional meeting.

Last month, the BoJ fired off its monetary policy bazooka, offering unlimited purchases of government bonds and more than doubling its upper limit of corporate bond buys.

It pledged again to maintain financial stability, "closely monitor" the impact of the coronavirus and vowed it will "not hesitate to take additional easing measures if necessary".

© 2020 AFP

©2020 GPlusMedia Inc.

12 Comments
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The ramifications of this virus will go on for ages, Japan and the UK governments have given, lent small businesses loads of cash to help them survive, which is good, but its going to be a long time before either government gets that cash back, some companies might not survive at all. I know of several companies near me that have filled for bankruptcy, I think it will make companies more streamlined, some have already here near me that have just laid off 3000 workers and more world wide, the company have been accused of using the C19 virus as a legitimate way to sack/dismiss employees.

2 ( +2 / -0 )

You can not give back loans when you have not been working for one months or more, because the money will be necessary just for restarting, paying off the debt you have accumulated.

0 ( +0 / -0 )

The overwhelming majority of Japanese will only feel the backblast from this monetary policy bazooka

0 ( +0 / -0 )

How much money do they actually have ? 50 trillion? 500 trillion? 5000 trillion? I’d love to know. They keep just adding extra tens of trillions like it ain’t no thing. Maybe next time they’ll say, ‘ Here’s 50 more trillion, but that’s the last you’re getting because we only have 8 trillion left after that ‘

0 ( +1 / -1 )

Pls becareful, some Japanese small companies are already not making good business due to incompetent employees. If the gov*t give these incompetent companies loans, it will not help nobody and will kill hard working companies that really needs help. Pls check a minimum of 3 years sales and reported tax profits.

3 ( +3 / -0 )

from another article also posted today ... """Japanese firms have often been criticized for hoarding huge levels of cash while refraining from boosting wages and capital expenditure."""

2 ( +2 / -0 )

@Simian

They have as much as they decide they have. It’s called MMT.

@Tara

You want them to change the policy they’ve had in place for the last 20-30 years? Why would they stop now?

1 ( +2 / -1 )

it's just another public wealth transfer to private companies without people benefiting. If you have a strong enough safety net, companies should be allowed to fail, and people live on the insurance they paid into. Then they can remake their businesses to meet the market. This will just continue companies that cannot change or pay their employees

1 ( +1 / -0 )

"How much money do they actually have ? 50 trillion? 500 trillion? 5000 trillion? I’d love to know. They keep just adding extra tens of trillions like it ain’t no thing. Maybe next time they’ll say, ‘ Here’s 50 more trillion, but that’s the last you’re getting because we only have 8 trillion left after that ‘"

1) Japan controls its own curency;

2) Japan is indebted to itself;

3) Japan holds massive reserves, domestic & external;

4) Japan is owed money by the World at large'

5) Japan can print more of its own currency whenever they feel fit .

6) Someone above has already mentioned it:

MMT.

Not many countries can do it; Japan certainly can.

And they're doing it, as you can see.

0 ( +1 / -1 )

just give 5000 trillion to each citizen and fire all those useless politics

2 ( +2 / -0 )

For those unaware, MMT = Mickey Mouse Theory

1 ( +1 / -0 )

The central bank aims to keep the inflation rate at around two percent but did not take any monetary policy action at Friday's exceptional meeting.

The BOJ has failed for many years to do this.

Government policy doesn’t allow inflation to occur.

0 ( +0 / -0 )

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