(Bloomberg) -- The Bank of Japan will hold an emergency policy meeting Friday to discuss details of a funding program to demonstrate its resolve to do whatever it can to support businesses struggling amid the fallout of the coronavirus pandemic.
The one-day gathering will start at 9 a.m., according to a central bank statement released Tuesday. Governor Haruhiko Kuroda had hinted that a meeting could take place before the next scheduled policy decision in June as he wanted to extend support to small companies as soon as possible.
Through the unscheduled meeting the BOJ likely wants to show its aggressive stance on taking action following emergency meetings by the Federal Reserve and European Central Bank. The BOJ is expected to keep its main monetary policy settings unchanged after more than doubling its limit on corporate bond buying and making its purchasing of government bonds unlimited last month.
The need to support small companies is intensifying as Prime Minister Shinzo Abe delivers his economic package at a slower pace than other developed nations. The majority of Japanese companies and households still haven’t received the government subsidies and cash handouts from the package approved on April 30.
The BOJ aims to use the new funding program to complement loan programs introduced by the government to reduce or exempt guarantee fees and interest rates on credit guaranteed loans.
The bank has already sketched out the key part of its funding program at its last gathering on April 27. By using this measure, financial institutions will be able to earn 0.1% interest for the amount of lending they carry out using the funding while paying no interest to the central bank. The BOJ is considering other details of the program including the range and scale of lending.
(Adds details of BOJ’s likely lending program)
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