Bank of Japan set to offer £22 billion low interest loans
The Central bank of Japan has today announced a £22 billion low interest loans program which will be made available to commercial banks in the region. Much like the UK, it is hoped that access to low cost finance will encourage Japanese banks to lend money to private businesses which are struggling to survive in the current economic environment. So will this work?
Despite showing signs of relative strength over the last few months many analysts believe that the Japanese economy is starting to slip back again. Even though the Japanese base rates are near 0% this is having little impact in the business arena with banks struggling to rebuild their balance sheets against an economic background shrouded with difficulties. The £22 billion of low interest loans is likely to be the first of a new raft of fiscal stimulus programs announced by the Japanese government who can ill afford for the economy to slip back into recession.
Japan, and the Far East in general, now play a prominent role in the worldwide economy therefore the eyes of many analysts and economists are focused upon this area. Unfortunately the United States economy cannot lift the whole worldwide economy single-handedly and will need assistance from the likes of Europe and the Far East.
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