Jiji Press TOKYO (Jiji Press) — The Bank of Japan plans to extend a key loan support program designed to help expand bank lending by one year beyond its currently scheduled expiration at the end of March, Jiji Press learned Friday.
Amid growing uncertainties over the global economy, the central bank sees the need to continue efforts to increase loans by commercial banks, informed sources said.
The BOJ will decide on the extension at its Policy Board meeting on Jan. 22-23, according to the sources.
The program, intended to help increase bank loans to growth industries, was introduced in 2010 and has been extended every one or two years. The balance of loans under the program stood at ¥6.6 trillion as of last month.
A similar loan support program, also scheduled to end at the end of March, will be extended by one year as well.
In addition, the BOJ will extend by one year a different program, aimed at supporting financial institutions in disaster-hit areas, which is set to expire at the end of April, the sources said.
At the upcoming policy-setting meeting, the central bank will consider revising down its inflation outlook for Japan for fiscal 2019 from April, from the current 1.4 percent, due to recent plunges in crude oil prices, the sources said.
The BOJ will also discuss whether to lower its fiscal 2020 inflation outlook, which now stands at 1.5 percent.
The BOJ will consider excluding impacts of a free education and nursing program for preschoolers, slated to start in October, from the inflation outlook calculations, viewing it as a special factor, the sources said.
The government expects the program to push down consumer prices by around 0.3 percent.
The central bank is likely to keep unchanged its current ultraeasy monetary policy, in which a negative interest rate of 0.1 percent is set for part of financial institutions’ current account deposits at the BOJ and yields on long-term Japanese government bonds are guided to around zero percent, the sources said.Speech