BOJ said to mull one-year extension of loan-support programs

[TOKYO] The Bank of Japan is likely to extend the life of two programs designed to boost private-sector lending that date from before Governor Haruhiko Kuroda took the helm, according to people familiar with the discussions.

It would be the third time the facilities were extended since Kuroda became governor. They are separate from the main monetary-easing initiative, which targets an expansion in the monetary base, mainly through purchases of government bonds.

The board likely will extend the programs by a year, according to the people, who asked not to be identified because the talks are private. The programs are currently set to expire in March, after the previous decision to continue them in January 2015.

The BOJ had extended 24.5 trillion yen of credit as of Dec 16 under the Stimulating Bank Lending Facility, which has unlimited capacity. Under the growth-supporting funding facility, the bank had lent 6.7 trillion yen as of Nov 30. That program also includes a dollar-lending facility.

The central bank is aiming to end years of deflation and achieve stable price increases. Core inflation, which the bank is targeting, dropped 0.1 per cent in October. That marked the third straight month of declining prices, well below the BOJ's inflation goal of 2 per cent.

BLOOMBERG