DBJ To Expand Emergency Lending Program to 10 Trillion Yen

The government and ruling parties are planning to boost the Development Bank of Japan's emergency lending program from its current 1 trillion yen to 10 trillion yen (approx. 100 billion US dollars).

The financing needs of Japanese companies are so strong that the emergency lending program has already depleted its 1 trillion yen budget after only 4 months since the inception of the program. Nissan Motor Co. and Mitsubishi Motor Co. are among major borrowers.

Restricted by their capital, commercial banks remain reluctant to meet the borrowing demands of those Japanese companies. It was reported that DBJ, on its way to privatization but still 100% Government-owned, initially resisted the government's plan as it will substantially inflate DBJ's balance sheet. The government is to inject 3 trillion yen of new capital to maintain DBJ's financial strength.

The government, the Bank of Japan, and ruling parties are employing all policy measures in order to bolster the struggling economy.