BOJ May Unveil Debt Program, Extend Commercial Paper Purchase
Originally reported on Bloomberg
The Bank of Japan will today unveil details of a plan to buy corporate debt and may extend lending programs in place to prevent a shortage of credit from deepening the nation’s recession.
Governor Masaaki Shirakawa and his colleagues have said they want to lower companies’ borrowing costs rather than trim the key interest rate, which is already close to zero. Policy makers will probably keep the overnight lending rate at 0.1 percent today, according to 27 of 28 economists surveyed by Bloomberg News.
The world’s second-largest economy shrank at the steepest pace since the 1974 oil shock last quarter as a global slowdown triggered record declines in exports and output. The resignation of Finance Minister Shoichi Nakagawa this week amid lawmakers’ accusations he was drunk at a Group of Seven briefing in Rome is hampering government efforts to implement a stimulus package to spur growth.