The Bank of Japan boosts its plan to help businesses

The Bank of Japan (BoJ) on Friday announced a new loan program to provide incentives to businesses in the amount of 30,000 billion yen (255 billion euros) to help tackle the crisis. In total, the extraordinary measures of the BoJ's taken since march to support the financing of japanese companies now represent the equivalent of 635 billion euros.

The BoJ also decided to extend six months until the end of march 2021, its other support devices exceptional. These include two mechanisms of interest-free loans with a maturity of up to one year and purchases by the BoJ of debt securities of companies. To encourage banks to play the game, they are given an interest rate to a positive 0.1% on their deposits with the BoJ equivalent to the loans that they grant to the companies, instead of a usual rate of negative - 0.1 percent. The european central Bank has developed a mechanism of the same type.

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The BoJ also extended its policy of redemptions of government bonds in japan to ensure that their yields on ten-year remain around zero.

Mimicking the us federal Reserve (Fed), the Bank of Japan does now more than the annual ceiling for its bond purchases, a way to highlight its commitment to act at all costs to reassure the markets and the financial system. Japan entered a technical recession in the first quarter of 2020 for the first time since 2015. The equation for the BoJ deepens even more with the threat of the return of deflation.

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