Bank of Japan doubles pot for bank lending after GDP wobble
THE BANK of Japan acted yesterday, after below-consensus GDP figures came out at the beginning of the week, extending the ability of banks to borrow at ultra-low rates.
The size of a facility designed to stimulate lending by banks is being increased from ¥3.5 trillion (£20.45bn) to ¥7 trillion, and increasing the amount individual banks can use. The programme means banks can borrow at 0.1 per cent for four years.
“The bank is concerned about Japan’s weak growth after the disappointing fourth quarter GDP data and is committed to supporting the economy,” said Marshall Gittler of IronFX Global.
“With serious structural reforms to improve the long-term growth potential and the sustainability of public finances still elusive, the increasing reliance on fiscal and monetary stimulus is becoming ever more of a long-term risk,” added Berenberg senior economist Christian Schulz.