Japan will spend more than $ 137 billion to mitigate the effects of the virus
US, WASHINGTON (ORDO NEWS) — Japanese Prime Minister Shinzo Abe’s promise of “huge” incentive measures includes spending of at least $ 137 billion, partially funded by bond deficits, sources said.
Although the volume of debt issuance is likely to be modest, this decision will draw significant market attention to the difficult financial situation of Japan. Investors continue to sell off even safe haven assets, such as government bonds, in favor of cash amid panic in the market due to the influence of the coronavirus.
The representative of the Ministry of Finance of Japan said that no decision on the issue of additional debt has yet been made.
“We need to introduce large, powerful economic and fiscal measures comparable to the enormous scale of the consequences of the outbreak of the coronavirus,” Abe said in parliament on Monday.
The Bank of Japan is also ready to expand incentive measures for the second consecutive month in April, if a pandemic leads to job cuts and capital costs, which could undermine the prospects for economic recovery, sources familiar with the position of the regulator said.
“The key will be whether the Japanese economy can recover, as the Bank of Japan now predicts, after a temporary crash caused by an outbreak of coronavirus,” said one source who requested anonymity because of the sensitive nature of the issue.
“If further monetary steps are required, the Bank of Japan is ready to act. At the same time, he will take into account the expected effect of the government stimulus package, ”the source said.
The next meeting of the Bank of Japan should be held April 27-28.
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