Japan central bank in $279-billion loan boost for small firms

TOKYO, Japan – Japan’s central bank on Friday, May 22, offered hundreds of billions of dollars in additional lending to help small firms in the world’s 3rd largest economy struggling with the economic devastation wrought by the coronavirus.

The Bank of Japan (BoJ) 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 6 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, May 18, showed Japan had dived into its first recession since 2015 in the 1st quarter, with most economists warning the worst was still to come.

Adding to the BoJ’s headaches, the country slipped back into deflation for the first time in more than 3 years, with prices falling 0.2% in April, according to data released earlier Friday.

The central bank aims to keep the inflation rate at around 2% 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.” – Rappler.com