Japan gov’t to earmark 1 tril. yen for reserve fund to fight coronavirus

Japan gov't to earmark 1 tril. yen for reserve fund to fight coronavirus

Japan will earmark 1 trillion yen ($9.2 billion) for a reserve fund to fight the new coronavirus pandemic, according to a draft of an emergency economic package being compiled by the government.

With the fund, the government will provide an additional 10,000 yen per child for families that receive child allowances, says the draft made available on Sunday.

Prime Minister Shinzo Abe’s Cabinet is expected to approve the fund, together with a supplementary budget for fiscal 2020, in a meeting on Tuesday.

With the number of infections in Japan topping 4,500 and the domestic death toll exceeding 100, the government says the pandemic has caused “the biggest economic crisis since World War II,” according to the draft.

As a key pillar of the emergency package, the government will provide 300,000 yen to households whose income has fallen by more than half from the previous year, it says.

Households whose income has reduced to a level that would exempt them from paying the resident tax will also be eligible for the cash handout program.

Applicants will be required to file for support at their respective municipal government offices.

The additional child-rearing assistance will be distributed to households that receive 10,000 to 15,000 yen a month for children up to ninth grade, usually 15 years old, according to the draft.

The additional 10,000 yen per child will be provided one time only.

In a meeting of Liberal Democratic Party executives on Sunday, the government also reported a plan to extend 2 million yen for small and medium-sized businesses whose income has fallen by more than half, as well as 1 million yen for the self-employed such as freelance workers.

(Stores are closed in Tokyo’s Asakusa district on April 5, 2020.)

Interest-free loans of up to 30 million yen will be provided through private financial institutions for small and midsized companies whose sales have fallen by 20 percent or more in the past month. The loans will be available for three years.

In an effort to help companies — regardless of their size — bring production facilities back to Japan, the government will subsidize half of their relocation costs.

For major companies, the government will expand the size of crisis response loans through the Development Bank of Japan and other lenders to 5 trillion yen from the current 200 billion yen.

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