The actual Japan Bank for International Cooperation, known as JBIC, is providing a $15 billion credit line to Mitsubishi UFJ Monetary Group Inc’s banking unit, the state-run lender said inside a statement on its website today. Units of Sumitomo Mitsui Financial Group Inc and Mizuho Monetary Group Inc each received $14 billion in credit underneath the pact.
Prime Minister Yoshihiko Noda is under pressure to assist Japanese companies weather the yen’s 11 per cent rise against the dollar previously six months, which has hampered the nation’s recovery from the record earthquake in March. The deal is aimed at helping banks to procure dollars and gives loans to companies planning acquisitions abroad, the statement stated. “This is a preparatory measure for any future event that could make it difficult for Japanese banks to procure the dollars on the market, ” said, an analyst at Deutsche Bank AG.
“Still, Japan’s government must swiftly reconstruct the earthquake-damaged nation and push domestic financial growth. ”
The yen, which has gained against the dollar like a haven amid concerns the European debt crisis will aggravate, traded at 76. 73 per dollar in Tokyo.
$100 MILLION PROGRAM
The credit lines are part of a government program unveiled in August release a $100 billion of foreign-exchange reserves to the state-owned lender to finance exporters and spur purchases overseas, the statement said.
Katsunori Nagayasu, head from the Japanese Bankers Association, said last month that persistent gains within the yen might push companies to shift production and research abroad to manage currency-related costs.
Japanese companies have announced overseas takeovers amassing $56. 7 billion so far this year, the highest in 3 years, according to data compiled by Bloomberg.
JBIC was established through the government to promote overseas development and acquisition of organic resources, improve Japanese companies’ competitiveness, finance business abroad and react to global financial disruptions, according to its website.
Source : Business-Standard