Japan, BOJ pledge joint action to keep cos afloat

Japan’s government and its central bank issued a rare joint statement on Friday, vowing to cooperate further on aggressive measures to fund struggling companies and support a battered economy.

On a day when inflation fell below zero for the first time in more than three years, Prime Minister Shinzo Abe’s administration and the Bank of Japan focused on battling the economic impact of the coronavirus while putting the risk of deflation on the back burner for now.

First the BOJ unveiled an additional 30 trillion yen ($279 billion) of loan support for small businesses at an emergency meeting that makes its package of virus measures roughly equivalent to the annual lending of one of the nation’s three mega banks.


Then came the joint statement pledging BOJ cooperation with the government after a meeting between governor Haruhiko Kuroda and finance minister Taro Aso.

“The Bank of Japan and the government must send the message to the world that we are coming together as one,” said Aso.

Central banks and governments in some countries simply weren’t on the same page and needed a reminder of the benefits of joint action, he added.

“Even if Japan manages to escape this predicament by itself, it’ll still suffer if other nations can’t, and exports and inbound tourism can’t grow,” Aso said.

Combined with an earlier lending facility and its buying of corporate bonds and commercial paper, the BOJ said its coronavirus response measures now total 75 trillion yen.