The BoJ cuts aid to large companies but extends it to SMEs

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Tokyo, Dec 17 (EFE) .- The Bank of Japan (BoJ) announced today the extension until September 2022 of aid for small and medium companies and a cut of the same for large corporations, less weakened at a time when that the entity considers that financial conditions have improved.

In its two-day monthly meeting on monetary policy that ended this Friday, the BoJ agreed to extend, with a smaller format focused on supporting SMEs, for six more months the Special Financial Support Program in Response to Covid-19, which was ending next year in March and was already extended for the first time in June.

The economic situation in Japan differs according to the type and size of companies, with differences between manufacturers and service providers and between large corporations and SMEs, with the latter having greater financing needs.

During the pandemic, the BoJ granted funds to banks to extend loans to companies affected by the resulting economic crisis, as well as the extensive purchase of corporate bonds and promissory notes to combat the effects of the health crisis.

After the meeting, the BoJ announced in a statement that it will keep rates in negative territory (-0.1%) and that it will continue to buy Japanese bonds issued by the Government so that the yield of these 10-year bonds remains around 0% , and thus facilitate loans to SMEs and households.

According to the statement issued by the entity at the end of the meeting, “financial conditions in Japan have improved as a whole despite the continued and significant impact of the new coronavirus.”

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For large companies, the BoJ considers that “the conditions for issuing negotiable instruments and corporate bonds have been favorable” and that, although the situation has improved for SMEs, “weakness continues in certain segments, such as face-to-face services “. EFE

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