BOJ unveils new loan scheme to support growth areas

(For more stories on the Japanese economy, click [ID:nECONJP])

TOKYO, May 21 (BestGrowthStock) – The Bank of Japan said on Friday it
will offer 0.1 percent loans with a maturity of one year to
private banks, fleshing out a new loan scheme aimed at
encouraging commercial banks to lend more to industries with
growth potential.

The central bank also upgraded its economic assessment to say
the economy is “starting to recover moderately” due to
improvements in overseas economies.

As widely expected, the BOJ kept its policy rate unchanged at
0.1 percent in a unanimous vote.

BOJ Governor Masaaki Shirakawa will hold an embargoed news
conference, with his comments expected to come out sometime after
4:15 p.m. (0715 GMT).

Shirakawa instructed BOJ staff last month to consider a
scheme to redirect money to industries with areas of potential
new demand. He said the framework would be part of an effort to
boost Japan’s potential economic growth, which now hovers around
0.5 percent, and pull it out of deflation.

Solid exports to Asia have helped Japan’s economy recover
gradually after pulling out of recession in the second quarter of
last year.

But with persistent deflation and market turmoil due to the
European debt crisis clouding the outlook, analysts expect the
BOJ to keep rates near zero and stand ready to loosen monetary
policy further when necessary.

Stock Market Advice
(Reporting by Leika Kihara, Rie Ishiguro; Editing by Hugh
Lawson)

BOJ unveils new loan scheme to support growth areas