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Thursday, Aug. 25, 2011
Loan program takes aim at surging yen
By JUN HONGO
The government Wednesday unveiled a $100 billion program designed to extend loans to domestic firms to spur overseas investment, in a bid to both take advantage of and counter the effects of the surging yen.
Finance Minister Yoshihiko Noda said that under the scheme, which will tap the nation's foreign reserves, the government will provide dollars to the Japan Bank for International Cooperation, which will in turn give low-interest loans to private-sector companies.
The goal is to encourage domestic companies to conduct mergers and acquisitions overseas and purchase energy resources, Noda said.
"We are hoping that this will address the yen's one-sided surge" on currency exchange markets, Noda told reporters. He expressed the hope that the one-year program will encourage the private sector to make the best use of the yen's relative strength against the dollar while easing the currency's rise.
No new law or extra budget is required to implement the $100 billion fund and closer monitoring of the exchange market, Noda said, emphasizing that the government will continue to act without delay to prevent the yen's appreciation from hurting the economy.
"This was a decision made because the quick surge of the yen called for a fast countermeasure," Noda told reporters.
The dollar nose-dived against the yen following the March 11 disaster in Tohoku, hitting a postwar record of ¥75.95 to the dollar on Aug. 19.
The Finance Ministry and Bank of Japan have twice intervened in the currency market since the quake, to little effect.