The Japanese government plans to provide public funds for industries beyond the banking sector in a bid to support non-financial firms hit by the economic crisis, news reports said on Saturday. Japan has so far formed a system to inject capital into banks, but the proposed framework would be the first of its kind specifically to assist non-financial firms, the Nikkei business daily and Kyodo News said.
By casting a broader safety net, the government aims to help companies bounce back from sluggish earnings and encourage private banks to provide loans for cash-strapped firms, the daily said. Under the framework, the government-run Development Bank of Japan will purchase preferred stock to be issued by companies whose earnings are deteriorating, Kyodo said, quoting sources.
The government plans to secure several hundred billion yen (several billion dollars) for the framework by March, while considering raising the funds to a few trillion yen by March next year, the Nikkei said. Parliament is set to pass the current fiscal year's second extra budget, which features one trillion yen for corporate funding activities, and the government plans to use the money for the framework, the daily said.