With the world’s second-biggest economy, still barely picking up from its deepest recession in decades, the central bank is likely to extend the measures, which include buying commercial paper and corporate bonds from banks, beyond their September expiry.
The BoJ may announce its decision to keep the measures in place after its two-day policy review that ends today, or at its following meeting in August.
Of the firms surveyed, 49 per cent said they wanted the BoJ to extend its programme of offering long-term loans to banks at 0.1 per cent interest, while only 18 per cent said the step was no longer necessary.
The survey showed 42 per cent wanted the BoJ’s commercial paper buying to be extended, while 22 per cent wanted it scrapped. For the BoJ’s corporate bond buying, 41 per cent wanted this extended, while 22 per cent said it should end in September. Many companies said the measures should be maintained as a stopgap because the economy was still in a bad shape and financial conditions have hardly normalised.
“Banks are very cautious about lending money so we’re worried that funding conditions may worsen further for regional firms,” a company in the retail sector said in the survey.
The survey was conducted from June 26 to July 13 on 400 big companies, of which 226 to 227 companies replied.
The majority view within the BoJ is that the extraordinary measures should be extended beyond their September deadline without significant changes.
While some BoJ officials say signs of recovery in the economy and in credit markets may call for a retreat from the measures, most argue conditions remain tough enough to warrant such an extension.
Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.