BOJ’s Unlimited Loan Program Seen Open to Use by Hedge Funds

The Bank of Japan plans to avoid restricting where money ultimately flows from its program of unlimited lending to banks, meaning cash could go to companies including hedge funds, people familiar with the central bank’s discussions said.

The BOJ doesn’t want to see credit extended to the public sector, such as through funding purchases of government securities, the people said. In October, the BOJ said inter-bank lending wouldn’t be available for use through the facility. Aside from the exceptions, the bank wants to avoid limits so the program is most effective, they said on condition of anonymity because the discussions are private.