In what we can only attribute to a delayed reaction to a news story that hit earlier in Japan’s Kyodo, according to which Japan was now considering a JPY20 trillion stimulus package, double what had been previously speculated, the USDJPY surged on now concurrent news, spiking by 0.5% and hitting the highest level since June 7.
For those who missed the Kyodo report, it said that Japan’s newly mulled JPY20 TRN package will be more than than an initial plan for just over 10 trillion yen to counter possible effects of the U.K.’s decision to leave the European Union.
- New plan will include projects for FY2017 and beyond; increase low-interest “zaito†loans by 6t yen
- Size may be increased further
- Govt to seek cabinet approval of plan in early August
- Package partly funded by extra budget for FY2016
- 8.3t yen for infrastructure, including 3t yen for Osaka maglev train extension
- Govt plans to lend dollar funds to cos. to counter Brexit impact
- Govt to provide 3t yen from FX reserves to JBIC for lending to Japanese cos.
- 3.4t yen to be allocated for cos. building infrastructure overseas
- Funds also going toward improving disaster resilience of buildings and supporting farm exports
