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Citing sources familiar with the Bank of Japan’s (BOJ) thinking, Reuters reports that the central bank may deploy measures to ensure companies hit by the coronavirus outbreak do not face a financial squeeze before the March end of the current fiscal year.

Key takeaways

“The central bank is entertaining the idea of using existing loan programmes, or creating a new one, that offer financial institutions incentives to lend to small and mid-size firms hurt by the epidemic.

Such a step would ease any financial strain companies face amid slumping sales and help them close their books for the current fiscal year.

One of the things central banks can do in a situation like this is to ensure there is ample liquidity, and help the money reach companies that are in need.

The idea could be among options up for debate” at the BOJ’s March 18-19 rate review.”