BOJ Expands Coronavirus Lending Programme to Over $1tr

Source: Regulation Asia Editors, Regulation Asia 2020-06-17

BOJ governor Haruhiko Kuroda indicated that the total size of the programme could rise further, particularly if a second wave of Covid-19 infections emerges.

The BOJ (Bank of Japan) on Tuesday (16 June) said it would increase its Covid-19 lending programmes to over JPY 110 trillion (USD 1.02 trillion), up from about JPY 75 trillion announced last month.

The programme involves JPY 90 trillion of zero-interest loans to banks if they boost lending to companies hit by the pandemic, to prevent a liquidity squeeze. The other JPY 20 trillion is allocated to buying commercial paper and corporate bonds.

BOJ governor Haruhiko Kuroda indicated that the total size of the programme could rise further, particularly if a second wave of Covid-19 infections emerged.

“We can’t rule out the risk of a second wave of infections,” Kuroda said, suggesting that such a scenario could force the BOJ to extend its crisis-response tools beyond the current March 2021 deadline.

“If the need for our support diminishes, we can ponder an exit. But we are ready to keep these supports in place for quite a long time.”

The BOJ maintained its policy rates at between -0.1% and 0%, and reiterated its pledge to maintain its annual purchasing targets for ETF and J-REITs at JPY 12 trillion and JPY 180 billion per year, respectively.

BOJ

Haruhiko Kuroda

BOJ Expands Coronavirus Lending Programme to Over $1tr

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