Mizuho Corporate Bank will sell asset-backed commercial paper worth between 20 billion yen and 30 billion yen to the Bank of Japan, a bank spokesman said Tuesday.
In the process, it will become the first financial institution to use a BOJ program to lure the central bank into an outright purchase of private-sector risk assets.
The BOJ will start buying commercial paper backed by sales credits that small and midsize companies owe to large businesses, possibly next Monday, the spokesman said.
The new ABCP purchasing program is aimed at aiding the financing of small businesses by promoting development of Japan's asset-backed securities market, the spokesman said.
At present, major companies are imposing harsher credit terms on their business deals with small and midsize firms, such as requiring them to meet shorter payment deadlines.
The BOJ's outright purchases of securities backed by these sales credits will allow major companies to turn them into cash more quickly.
Mizuho Bank, another core unit of Mizuho Financial Group Inc., is expected to join forces with Mizuho Corporate Bank in selling ABCP to the BOJ.