"Japan's economy is under strong downward pressure, mainly on the production side, due to the effects of the earthquake disaster," the central bank said.
"The earthquake has sharply dampened production in some areas by damaging production facilities, disrupting the supply chain, and constraining electric power supply." The 1.0 trillion yen ($11.7 billion) lending programme offers cheap one-year loans to ensure that financial institutions in disaster-hit areas can meet demand for post-quake reconstruction funding, the bank said in a statement. The bank injected a record amount of cash into the banking system after the quake and doubled its asset purchase fund to 10 trillion yen. The total cost from collapsed or damaged houses, factories and infrastructure such as roads and bridges is estimated at 16-25 trillion yen over the next three fiscal years, according to the Cabinet Office. The estimate does not account for wider issues such as how radiation from the stricken Fukushima nuclear plant will affect food and water supply, amid an ongoing food scare.