The Bank of Japan introduced a new lending program to help small and medium-sized firms and left its target for short-term interest rate and the bond yield target unchanged on Friday.
At the emergency meeting, the policy board of the BoJ unanimously decided to launch a lending scheme worth about JPY 30 trillion to support SMEs struggling to operate amid the spread of the novel coronavirus, or Covid-19.
According to the new scheme, the bank will provide funds to eligible counterparties against pooled collateral for up to 1 year at the loan rate of zero percent.
The board voted 8-1 to retain the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank.
Also, the bank will continue purchase a necessary amount of Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around zero percent.
As for CP and corporate bonds, the BoJ will maintain their amounts outstanding at about JPY 2 trillion and about JPY 3 trillion, respectively.