Japan’s national bank will meet from today until December 17 to decide whether to extend its emergency counter-pandemic funding program.
The Bank of Japan (BOJ) set this program up last year in a bid to boost cash-flow into the economy as people were spending less due to the financial hardships caused by COVID-19.
The program included two strategies. The first involved buying debt from large corporations and the second provided aid to loan providers so they could help small to medium-sized enterprises stay afloat. These programs are not set to expire until March 2022, but the BOJ’s upcoming meeting will consider whether the program should be lengthened in light of the rise and spread of the Omicron variant.
Expect a divided BOJ decision and a likely deferral of the decision to January 2022. Japan has only recently seen real economic recovery, and it has come at a slower pace than competing economies. Omicron and the possibility of future variants threatens the Japan’s recovery. To prevent the economy from losing its modest growth, the BOJ will likely extend these measures through the end of the second quarter.
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Todd is a Current Developments Analyst at The Daily Brief. He specializes in the Former USSR and writes for several publications on topics in international law.