The Bank of Japan said Tuesday it will buy subordinated loans from banks in an effort to spur lending and ease the recession.
The central bank said it may purchase up to ¥1 trillion of the subordinated loans in an exceptional step.
The 48 percent drop in the Nikkei average since the beginning of 2008 has decimated the value of stocks held by banks, making it harder from them to maintain capital ratios and limiting their ability to lend.