Japan moves forward with $1tn in new coronavirus relief

TOKYO — The Japanese government has begun finalizing a coronavirus relief package of more than 100 trillion yen ($928 billion), aiming to strengthen the corporate safety net and follow up on last month’s 117 trillion yen stimulus.

Slated for cabinet approval Wednesday, the second supplementary budget for fiscal 2020 will aid struggling enterprises and increase support for idled workers.

More than 60 trillion yen will go toward unsecured financing to businesses, which will pay little or no interest. The state-backed Japan Finance Corp. and private-sector lenders will extend the loans.

Roughly 12 trillion yen will come in the form of capital support. Public-sector lenders will provide subordinated loans. The state-backed Development Bank of Japan will expand its investment quota, and the public-sector Japan Investment Corp. will extend funds.

An existing pool of public funds to rescue struggling lenders will be expanded to roughly 15 trillion yen.

Tenant leases will be subsidized for small and midsize businesses, as well as sole proprietorships, that have seen their sales plunge. The ceiling will be raised on the employment adjustment subsidy, provided to enterprises that keep paying idled workers.

Idled workers will also qualify for a new benefit paid directly by the government. Financial support to such workers will total about 330,000 yen a month.

Subsidies to prefectures to support their medical infrastructure will be expanded. Funds will also go to universities that offer tuition relief to low-income students.

Direct allocations by the central government constitute only a portion of the new budget, which also includes funds from local governments and the private sector. The first supplementary budget, passed in April, included more than 48 trillion yen in central and local government spending.

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