The offer is part of a government program releasing $100bn of forex reserves to JBIC to spur purchases overseas.
Japan’s three biggest banks received a combined $43 billion credit line from the government to help finance domestic companies’ overseas takeovers as businesses seek to counter the strong yen.
The Japan Bank for International Cooperation, known as JBIC, is offering a $15 billion credit line to Mitsubishi UFJ Financial Group Inc.’s banking unit, the state-run lender said in a statement on its website Wednesday. Units of Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. each received $14 billion in credit under the pact.
Prime Minister Yoshihiko Noda is under pressure to help Japanese companies weather the yen’s 11 percent rise against the dollar in the past six months, which has hampered the nation’s recovery from a record earthquake in March. The deal is aimed at helping banks to procure dollars and offer loans to companies planning acquisitions abroad, the statement said.
“This is a preparatory measure for any future event that may make it difficult for Japanese banks to procure the dollars in the market,” said Yoshinobu Yamada, a Tokyo-based analyst at Deutsche Bank AG. “Still, Japan’s government needs to swiftly reconstruct the earthquake-damaged nation and push domestic economic growth.”
The yen, which has gained against the dollar as a haven amid concerns the European debt crisis will worsen, traded at 76.73 per dollar as of 3:57 p.m. in Tokyo.
The credit lines are part of a government program unveiled in August to release $100 billion of foreign-exchange reserves to the state-owned lender to fund exporters and spur purchases overseas, the statement said.
View the full story in Business Week.
Do you know more about this story? Contact us anonymously through this link.