BOJ more likely to prolong company funding support schemes subsequent week: sources
© Reuters. FILE PHOTO: A man wearing a protective mask walks past the headquarters of Bank of Japan amid the coronavirus disease (COVID-19) outbreak in Tokyo
TOKYO (Reuters) – The Bank of Japan is likely to decide next week to extend a range of steps aimed at easing corporate funding strains as a resurgence of coronavirus infections cloud the economic outlook, say sources familiar with its thinking.
The measures, due to expire in March, will likely be extended for at least half a year, four sources said on condition of anonymity as they were not authorised to speak publicly.
“With so much uncertainty over the outlook, it’s desirable for the BOJ to reach a decision on the extension as early as possible,” said one of the source, a view echoed by three other sources.
There is a slim chance a decision may be postponed until the BOJ’s rate review in January, if some in the board prefer to wait for more data on corporate funding strains, they said.
But central bank policymakers are leaning toward reaching an early decision given heightening uncertainties over the outlook, they said.
The BOJ eased policy in March and April mostly by ramping up asset purchases and creating a new facility to funnel funds via financial institutions to cash-strapped firms hit by COVID-19.
The package of measures, which also includes increased purchases of corporate debt, was deployed as a temporary measure to deal with immediate funding strains from the pandemic.
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