Measures in the crisis: Japan's Central Bank to demonstrate the fiscal domination

If there is still a document needed to be had, that the Japanese monetary policy is dominated by fiscal policy, then it has to be delivered on Tuesday the Bank

Measures in the crisis: Japan's Central Bank to demonstrate the fiscal domination

If there is still a document needed to be had, that the Japanese monetary policy is dominated by fiscal policy, then it has to be delivered on Tuesday the Bank of Japan. After three monetary policy meetings from March to may, in which the Central Bank dusted off its financial support programs for, among others, of the corona of a crisis struck firm and expanded, remained the Bank of Japan on Tuesday in a monetary policy relaxation, the effects of the existing measures assess only once. This is the narrative that is being spread by the Japanese media. But in fact, the Central Bank has expanded its Corona against measures of 75 trillion Yen to 110 trillion Yen (910 billion Euro). It loses you in its monetary policy statement, not a word. Only in an attached graphic, the new volume of the program are shown.

Patrick Welter

a correspondent for Economics and policy in Japan, based in Tokyo.

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open How the Bank of Japan can remain seemingly inactive, but at the same time, a further temporary lines of credit are about 35 trillion Yen? Both are not speaking, if the Central Bank is not the acting Institution. Just that happened in Japan. The government has extended their warranties and programs for loans to enterprises. Automatically, the financial support program, with the Central Bank, commercial banks, money provided on the condition that they are sufficient in accordance with the Wishes of the government business loans is expanding so that. Indirectly, the Central Bank is financing the emergency loans to companies, with the help of the government to improve the liquidity situation and the economic push just want.

The economic situation remains serious

in Total, the Central Bank is providing a credit volume of up to 19 per cent of all the liabilities of Japanese companies (excluding financial companies) amounts calculated Marcel Thieliant of Capital Economics. He doesn't expect the Central Bank still needs to provide more money. The banks had no difficulties to Finance themselves in the interbank market. In April and may, the Japanese banks have issued far more loans than before, partly because large companies wanted to improve their liquidity situation as a precaution.

According to estimates by the Bank of Japan is the economic situation in Japan for the time being more serious. Export and industrial production were substantially fallen. The Central Bank expects a gradual improvement. It is telling that Japan has eliminated the Virus state of emergency and also other countries to open up their economies gradually again. In the first quarter of the year, the economy's contraction in Japan by 0.6 percent compared to the previous quarter. Analysts and economists expect the current quarter from April to June, a decline of 5 percent or more.

Updated Date: 16 June 2020, 03:19

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