Japan announces $100-bn credit facility to help companies combat rising yen
24 Aug 2011
Hours after the downgrade, the government announced a $100-billion credit facility to help the Japanese economy ride out a spike in the yen in recent weeks amid the global market turmoil, which has battered Japan's export-led economy.
The facility, which will be available to for one year, is aimed at helping companies in a number of ways.
Japan's ministry of finance said the fund would help companies expand their overseas operations and secure energy resources.
The government's programme will send foreign currency reserves to the state-owned Japan Bank for International Cooperation, which would then provide loans to commercial banks for lending to companies.
Companies can avail of cheaper loans and easier access to financing, which will boost foreign acquisitions by Japanese firms.
Japanese companies expanding overseas will need to convert their yen into US dollars, or other foreign currencies in order to pay for their acquisitions, thereby weakening the yen.
