Demand for BOJ Virus Loans Jumps Fivefold on New Lending Program

(Bloomberg) -- Demand for Bank of Japan loans aimed at helping struggling companies jumped fivefold after the introduction of a second loan program, the latest data show.

The central bank lent another 8.3 trillion yen under its two virus-response lending programs in an operation Wednesday. The second program aims to offer loans to a broader range of banks so that the BOJ can extend its reach to smaller companies in need of help amid the pandemic.

The BOJ didn’t break down the demand for each program in the total. In the previous operation on June 9 for just the first lending program, the bank lent 1.6 trillion yen. A surge similar to Wednesday’s also took place in May when the BOJ started offering interest to encourage more lending.

Governor Haruhiko Kuroda has pledged to take every measure necessary to shore up corporate financing and the stability of financial markets. His board is watching the effects of virus measures unveiled since March, according to a summary of opinions from its June meeting released earlier Wednesday.

BOJ Hints Initial Crisis Response Is Done for Now, Summary Shows

The BOJ unveiled details last month of the new lending program, which is linked to government lending measures. The size of the two lending programs is expected to be about 90 trillion yen, the central bank said at its June meeting.

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