Reuters: US Dollar Report: UPDATE 1-Japan extends dollar loan scheme to deal with strong yen

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-Japan extends dollar loan scheme to deal with strong yen Aug 7th 2012, 02:03 Mon Aug 6, 2012 10:03pm EDT * Scheme aimed at boosting firms' overseas investment * Finmin says watching risks from yen gains to economy By Tetsushi Kajimoto TOKYO, Aug 7 (Reuters) - Japanese Finance Minister Jun Azumi said on Tuesday the government will extend its dollar credit facility aimed at helping companies invest overseas by six months as part of its efforts to cope with a strong yen. The government will extend the programme, which can deploy up to 10 trillion yen ($127.81 billion), until the end of the fiscal year in March 2013. The scheme was initially launched in August 2011 for a period of one year in response to rapid yen gains. The minister said the decision was made in view of increasing demand for the facility while considering the need to watch risks a strong yen poses to the Japanese economy. "A strong yen gives a headwind to Japanese manufacturers ... We are providing this facility to help companies carry out M&As overseas and gather strength," Azumi told reporters after a cabinet meeting. "I want the private sector to make the most of this fund for spending on M&As if there are good deals overseas." Under the scheme, JBIC obtains dollars at low rates from the government's special account that holds foreign reserves worth $1.27 trillion, to offer them to firms with plans to make acquisitions of companies overseas and secure energy resources. JBIC has so far provided about 890 billion yen in loans to companies engaging in 15 deals involving M&As and resources, and it plans to extend another 410 billion yen to 12 more deals. The government expects the scheme to help curb the yen's gains as companies' overseas investments boost dollar demand. Japan spent a record 8 trillion yen in unilateral intervention in the currency market Oct. 31 2011, when the dollar hit a record low of 75.31 yen, and another 1 trillion yen in November on undeclared forays into the market. Japanese authorities have stayed out of the market since the November interventions but resumed firing verbal salvoes recently on concerns that renewed rises in the yen threaten the economy's recovery from last year's earthquake and tsunami. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions