The Japanese central bank has hinted that it may be prepared to expand its lending programs in an effort to aid reconstruction in the wake of the Mar. 11 earthquake and tsunami that sent the economy back into a recession, according to Bloomberg. On Wednesday, the Bank of Japan’s Governor Masaaki Shirakawa said that officials were “examining whether there’s a way to enhance” the bank’s ¥3 trillion lending program that targets growth-boosting industries. Additionally, the minutes of the BOJ’s April meeting were released today and show that officials on the bank’s policy board discussed the need to expand a ¥1 trillion program aimed at helping companies weather the lingering effects of the disaster.
A separate report form the Japanese finance ministry showed that exports dropped at the fastest rate since October 2009 during April, creating the country’s first trade deficit during that month in 31 years. According to The Wall Street Journal, the Organization for Economic Cooperation and Development said on Wednesday that the Japanese economy would likely remain in a recession through the second quarter as supply chains are re-established. The group expects the country to see a 3.7% contraction in gross domestic product from March to June before rebounding robustly in the closing half of the year. Nonetheless, the OECD encouraged the BOJ to be ready to provide additional aid to the struggling economy.
Click here to read the story on the BOJ lending programs from Bloomberg News.
Click here for coverage of the OECD outlook from The Wall Street Journal.