While the Bank of Japan left monetary policy unchanged yesterday they did make a few changes …. changes that should be beneficial for small and medium size businesses in Japan:
- Decides to extend deadline for loan programmes aimed at encouraging banks to boost lending beyond March
- Decides to expand size of loan programme aimed at encouraging banks to boost lending
- Deadline for loan programmes extended by 1 year
- Says expands loan programme for growth industries to 10 trln yen from 7 trln yen
- Says to allow banks that don’t have accounts at BOJ to tap existing loan scheme aimed at boosting lending
Says the FT (via FastFT, which is gated) – bolding is mine:
- Around 99.99 per cent of all registered companies are small- and medium-sized enterprises (SMEs) earning just over half GDP, according to the Ministry of Economy, Trade and Industry (Meti)
- Equates to 70 per cent of the workforce, or almost 30m people
- Daiju Aoki, economist at UBS, said that the aim of expanding the schemes was to encourage lending to SMEs … any acceleration in lending growth to SMEs is likely to be beneficial for economic expansion
- Barclays go even further, saying the loan support program could even become the centrepiece of BoJ accommodation
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For FX, to the extent this program expansion diminishes the need for further easing it’s a positive input for the yen
