Japan central bank in $279 bn loan boost for small firms

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TOKYO, May 22, 2020 (BSS/AFP) – Japan’s central bank on Friday offered
hundreds of billions of dollars 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 programme 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 programme 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”.

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