"I want the BOJ to support financial intermediary functioning by
providing ample funds to help Japanese firms operating in Britain and
other companies in need of funds," he said.
Japan PM Abe urges BOJ to ensure market liquidity after Brexit vote
Japanese Prime Minister Shinzo Abe
on Wednesday urged the central bank to provide ample funds to the
market to ensure liquidity and keep the wheels of economy turning in the
wake of Britain's shock vote to exit the European Union.
"A sense of uncertainty and worry about risks remain in the markets," Abe told a meeting between the government and the Bank of Japan to discuss market developments after the Brexit vote rocked global financial markets.
It
was the second meeting between Abe and the BOJ following the referendum
and more are expected as Tokyo looks to put in place safeguards against
potential instability in financial markets after Britain's messy EU
divorce.
Abe worries Brexit could spread financial
turmoil and trigger an unwelcome spike in the yen, hurting the
export-reliant economy as a July 10 national election draws near.
The
rush of money to safe havens such as the yen has been stoked by fear
Brexit would adversely affect Britain's economy, and undermine already
fragile growth in the EU, causing more disruption in global investment
and trade.
"I want the BOJ to support
financial intermediary functioning by providing ample funds to help
Japanese firms operating in Britain and other companies in need of funds," he said.
Companies
asked the central bank to loan them $1.47 billion in its regular
dollar-supplying operation on Tuesday. That was far greater than its
last operation before Britain's vote, but still less than the tens of
billions of dollars the BOJ supplied in operations after the 2008
collapse of Lehman Brothers
BOJ Governor Haruhiko
Kuroda told reporters after the meeting that the dollar-supplying
operation was a backstop and the central bank stands ready to provide
dollars as much as possible when necessary.
"At
the moment Japanese banks are equipped fully with dollars and foreign
currencies. In that sense, the scale (of the dollar-supplying operation)
was small and I don't think there's any problems at all with Japanese
banks' dollar funding."
At the meeting, Abe
also called on Finance Minister Taro Aso to keep close watch on currency
and financial market moves, and respond flexibly to economic and market
developments in close coordination with Group of Seven advanced
economies.
The government was ready to mobilise all policy tools to support Japan's economy and small firms, Abe added.