The Japan Bank for International Cooperation (JBIC) has signed a multi-billion yen loan to support the export of construction machinery to the United Arab Emirates.

JBIC and MUFG, which is co-financing the export credit line agreement, will each provide ¥3.5bn to UAE-based Dar Alhai Trading FZE (DAHT), meanwhile Nippon Export and Investment Insurance (Nexi) is insuring the private financial institution’s portion of the loan.

JBIC declined to comment on the tenor of the loan, but says that it will allow DAHT – which imports, sells and leases automobiles, construction machinery and other goods – to continue purchasing construction and other machinery from Japanese companies.

This follows on from a US$30mn deal the export credit agency (ECA) struck with JSW Steel in India in January, which also sought  to “expand exports of machinery and equipment from Japan”.

Co-financing that particular loan with Mizuho Bank, the pair provided US$49mn in total to the firm to purchase a complete set of facilities for a wire rod mill, used in the processing of steel, from Primetals Technologies USA and India, which is a joint venture of Siemens and Mitsubishi Heavy Industries.

As of yet, neither of Japan’s two export credit agencies, JBIC and Nexi, have announced any specific measures to tackle the impacts of novel coronavirus on trade, as ECAs across Europe have done in recent weeks.

ECAs in Poland, Norway, Denmark and Spain have announced varying forms of support in a bid to help domestic companies continue trading internationally, with the Polish agency Kuke taking on 100% of both commercial and political risk from exporters and banks financing or refinancing export transactions, for instance.

According to IHS Markit’s latest manufacturing PMI Japanese companies are feeling the pinch from the novel coronavirus, with the survey of around 400 manufacturers reporting that the sector had seen its sharpest fall in output since the aftermath of the 2011 tsunami.

Joe Hayes, an economist at the research firm, says: “Japan’s manufacturing downturn deepened in March as a result of the global Covid-19 pandemic which on top of the international supply chain paralysis caused by shutdowns in China, and now other parts of the world, has also dealt a severe blow to export demand.”