Signs of a recent move by the Bank of Japan’s Policy Board to take a series of new steps to enhance corporate financing were noted in its Oct. 13 meeting, according to the minutes released Wednesday.
Last week, the nine-member board decided to assist company fundraising by further utilizing its commercial paper purchase operations and adding corporate bonds to the list of permissible collateral in the future. The board also agreed to introduce a temporary financing scheme for banks in December so that they can ease the credit crunch and extend more loans to fund-strapped firms.
At the meeting, most of the board members agreed that the nation’s financial situation is quite severe and that virtually all possible steps have already been taken by the BOJ, the minutes show. Under such a situation, the members agreed to watch the effect of its monetary policy easing Sept. 9, under which the unsecured overnight call money rate was slashed to around 0.25 percent, and maintain the official discount rate at 0.5 percent, the minutes show.
Nonetheless, some members underlined the need for the BOJ to take additional measures to help relieve companies’ fundraising problems toward the end of fiscal 1998, the minutes state. One of the members proposed that such steps be specified in its decision, while others urged the board to ready itself for providing the capital market with more liquidity, the minutes show.
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