Japan Lowers Yen Loan Rates

Tokyo, April 15 (Jiji Press)--The Japanese government decided Monday to make Japanese yen loans easier to use by adopting measures including lower interest rates, aiming to support infrastructure exports by Japanese firms. The new loan terms and conditions, adopted at a ministerial meeting on infrastructure export strategy at the prime minister's office, will apply to yen-loan projects to be announced in April and later. For "tied" yen loans, extended at low interest rates on condition that the recipient countries choose Japanese companies as contractors, the standard rate will be reduced to 0.1 pct per annum from 0.2 pct. The scope of contractors, now limited to companies based in Japan, will be expanded to cover overseas subsidiaries of Japanese companies. For "untied" loans, which do not limit the contractors to Japanese firms, rates for projects under preferential terms will be cut to 0.01-0.6 pct per annum, from the current 0.55-1.20 pct. The government will make the loans available for more projects in "semideveloped" countries with relatively high income levels such as Thailand. In addition, the government will created a low-rate loan facility for postdisaster recovery, in which credit lines will be available at a rate of 0.01 pct for advance preparations for natural disasters. Meanwhile, for countries at least richer than low-income nations, including India, will be able to choose floating-rate yen loans. Currently, Japanese companies win some 36 pct of orders from yen-loan projects. The Japanese government hopes Japan's yen loans will become easier to use for developing counties and at the same time provide more infrastructure-related business opportunities for Japanese companies, officials said. END