Japan’s central bank on Friday announced its first investment fund for efforts to address climate change, as the government works towards its new target of reaching carbon neutrality by 2050.

The scheme, likely to start this year, will be a successor to an existing programme aimed at promoting economic growth more generally, the Bank of Japan said after a two-day policy meeting.

“Climate change issues could exert an extremely large impact on developments in economic activity and prices as well as financial conditions from a medium- to long-term perspective,” its policy statement said.

“The bank considers that supporting the private sector’s efforts on the issues from a central bank’s standpoint will contribute to stabilising the macroeconomy in the long run.”

Financial support measures for pandemic-hit businesses were also extended by six months to the end of March 2022, a day after the government approved lifting a virus state of emergency in nine prefectures including Tokyo.

Slightly looser “quasi-emergency” restrictions will be set in the capital and six other areas until July 11, less than two weeks before the postponed Tokyo Olympics begin.

The extension of business support had been widely expected, said Naoya Oshikubo, senior economist at SuMi TRUST.