Measures being studied include expanding low-interest loans to small and midsize businesses and providing support to companies that make high-value-added products in Japan, both aimed at preventing a hollowing out of industry and creating new jobs.

After the next administration takes the reins once Prime Minister Naoto Kan steps down, the government will develop concrete plans and include related expenses in the third supplementary budget.

In the meantime, the government is considering conducting yen-selling market interventions should the yen surge. The Japanese currency rose to a postwar high of 75.95 against the dollar in New York on Friday. The government and the Bank of Japan are prepared to conduct interventions early this week if the yen gains more strength.

via 2011/08/21 01:43 – Govt, BOJ To Fight Strong Yen With Slate Of Measures, Easing.

Compare with what the Bank of England is doing. What are the risks associated with encouraging banks to lend to businesses at this time? Curious readers might want to read this analysis.