TOKYO: The Japanese government Wednesday decided to use 1.2 trillion of the 10-trillion-yen reserve funds earmarked under its second fiscal 2020 supplementary budget to battle the novel coronavirus.

About 900 billion yen will go to cash relief mainly to small businesses hit by sales plunges, while 200 billion yen will be used for small-lot emergency loans to individuals.

The government plans to adopt the expenditures at a cabinet meeting Friday.

The number of businesses seeking the cash relief surged after the government began accepting applications in May. This caused concerns about a budget shortfall.

The planned spending from the reserve funds is considered large enough to support an additional 800,000 businesses.

The cash relief program provides up to 1 million yen to self-employed people and 2 million yen to corporations if their sales halve year on year in any given month due to the coronavirus crisis.

The emergency lending program offers up to 2 million yen in interest-free loans to households suffering hardship.

Of the 1.2 trillion yen, the government will also spend some 30 billion yen to strengthen quarantine measures for those entering Japan, including by expanding polymerase chain reaction tests.

The government can decide the use of the reserve funds at its own discretion. The funds draw criticism from opposition parties for their huge size.

The government claims that the size allows it to respond to the unfolding coronavirus crisis flexibly.

JIJI Press