Coronavirus - Government measures in key jurisdictions - Flipbook - Page 55
Japan
Contributor: Atsumi & Sakai
1
Loans and
financial
support
•
Ryuichi Nozaki | ryuichi.nozaki@aplaw.jp | +81 (0)3 5501 2138
Naoki Kanehisa | naoki.kanehisa@aplaw.jp | +44 (0)20 3696 6540
Akira Shimazaki | akira.shimazaki@aplaw.jp | +44 (0)20 3696 6540
The Japanese government declared a State of Emergency on 7 April and the same
day the Financial Services Agency (the “FSA”), Japan’s financial service regulatory
authority, requested financial institutions to support borrowers’ cash-flow by:
(i) actively providing new loans, and promptly and flexibly rescheduling repayment
terms of existing loans in light of changes to borrowers’ ability to repay,
Has the
government put
in place any new
bank funding
schemes?
(ii) cooperating with public credit guarantee associations (funded by local
governments) to provide loans with zero interest and no collateral,
(iii) not automatically triggering acceleration of repayments when borrowers
cannot comply with financial covenants but instead promptly and sincerely
discussing relaxation of covenants if the borrower requests,
(iv) promptly and flexibly changing repayment terms of residential loans or loans
for individual borrowers, or guarantees for either of them, and
(v) not recording borrowers’ delinquency information with credit information
institutions when any default is due to the impact of COVID-19.
2
Employment
What financial
support is the
government
providing to
businesses and
to individuals
on employment
issues?
•
On 16 April the FSA requested financial institutions to be flexible and not
immediately trigger the suspension of transactions when borrowers fail to pay
checks or promissory notes.
•
On 17 April the FSA announced that it will delay raising the minimum leverage ratio
requirement for banks whilst also disregarding banks’ deposits with the central
bank from the calculation of gross assets as the denominator for calculating a
leverage ratio, thus making it easier for banks to provide new loans or reschedule
repayment terms for borrowers impacted by COVID-19.
•
Japan Finance Corporation, a public financing corporation wholly-owned by the
Japanese government, has launched a programme of lending with no interest for
the initial 3 years for borrowers whose sales declined by 5% from the same period
in either of the two immediately preceding years but who are still hopeful their
business will recover in the mid or long term.
•
On 16 March the FSA relaxed the maximum lending limit per borrower under the
Money Lending Business Act.
•
Japan currently has an “Employment Adjustment Subsidy” system; this system has
been revised by the Japanese government to help businesses suffering as a result of
COVID-19. The system is designed to help employers avoid termination by covering
part of their employees’ salaries (up to a maximum of JPY8,330 per employee per
day and a maximum of 100 days in any 12 months (but disregarding days in the
period 1st April to 30th June 2020 if the subsidy was requested in that period))
during the period the employees are furloughed.
•
For more information (including the requirements to be eligible for the subsidy),
please visit our website here.
Government measures in key jurisdictions
55