Bank of Japan urged to free up cash as Brexit possibly disrupts global investement

Japanese Prime Minister Shinzo Abe has urged Japan’s central bank to ensure ample funds are available to help Japanese companies operating in Britain and shore up business at home after the UK’s shock vote to exit the European Union.

“A sense of uncertainty and worry about risks remain in the markets,” the Prime Minister reportedly told a meeting between the government and the Bank of Japan on Wednesday as Asian markets joined a rally.

According to the BBC, this was the second meeting between Abe and the bank following the referendum. More are expected as Tokyo looks to put in place safeguards against potential instability in financial markets from Brexit.

“I want the BOJ to support financial intermediary functioning by providing ample funds to help Japanese firms operating in Britain and other companies in need of funds,” Abe said.

Companies reportedly asked the central bank on Tuesday to loan them $1.47 billion (€1.33 billion) in its regular dollar-supplying operation.

That was far more than its last operation before Britain’s vote, but far less than the tens of billions of dollars supplied in operations after the 2008 collapse of Lehman Brothers, the BBC reports.

However, the Bank of Japan governor, Haruhiko Kuroda, told reporters that the central bank was ready to provide dollars when necessary.

A rush of money to safe havens such as the yen has been stoked by fear Brexit would adversely affect Britain’s economy and undermine growth in the EU, causing more disruption in global investment and trade.

In Tokyo, Abe called on his finance minister, Taro Aso, to keep a close watch on currency and financial market moves, and respond flexibly to economic and market developments in close coordination with the G7 economies.

European Central Bank president Mario Draghi told EU leaders on Tuesday that Britain’s decision to leave the EU could reduce eurozone growth by a cumulative 0.3% to 0.5% compared with previous estimates over the next three years, an EU official said.