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Economic Stimulus in Japan


Statement by Minister Aso and Governor Kuroda
on Countermeasures Responding to the Novel Coronavirus (Covid-19)

Economic activities in Japan and overseas, and the financial and capital markets have been severely affected by the novel coronavirus (Covid-19). The Japanese Government and the Bank of Japan have, in mutual cooperation, aggressively carried out various measures to ensure smooth corporate financing. In this way they hope to maintain stability in financial markets, and thereby support the overall economic activities.

The Government has been swiftly implementing the emergency economic measures amounting to 117 trillion yen (€620,694,712,500.00). The first supplementary budget was also decided in April, providing strong measures for supporting financing of firms with the total amount of 45 trillion yen. These measures include schemes enabling interest-free loans without collateral through both government-affiliated and private financial institutions. Furthermore, based on the directions by the Prime Minister, the second supplementary budget is under compilation. This will include measures to strengthen the financial functions such as increasing liquidity support and making use of quasi-capital instruments.

The Bank and Government Cooperate

The Bank of Japan, while cooperating with the Government, will actively support financing firms. The Special Program to Support Financing in Response to the Novel Coronavirus (Covid-19), will provide 75 trillion yen. The Bank has already been providing ample yen and foreign currency funds without setting upper limits. This is accomplished mainly through purchases of Japanese government bonds (JGBs) and the conduct of the U.S. dollar funds-supplying operations. This has been actively purchasing exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs).

There are various types of uncertainties at present regarding. For example, the timing of the spread of Covid-19 subsiding and future developments in overseas economies. The Government and the Bank are committed to making every effort to facilitate corporate financing. Their goal is to maintain stability in financial markets. Through the aforementioned measures, and doing whatever it takes to settle the situation, they will work together to bring the Japanese economy back again on the post-pandemic solid growth track.