TOKYO (Reuters) – The Bank of Japan will discuss further steps to ease corporate funding strains at this month’s rate review to pump more money to small firms grappling with slumping sales due to the coronavirus outbreak, sources familiar with its thinking said.

While discussions are still in the initial stages, possible options on the table include further increases in purchases of corporate bonds and commercial paper (CP), and an expansion in the range of assets the central bank accepts as collateral in offering financial institutions loans, they said.

“Corporate funding conditions continue to worsen. The focus for the BOJ is still crisis response, not what measures it can take to reflate the economy,” one of the sources said on condition of anonymity due to the sensitivity of the matter.

“The BOJ took steps to ease corporate funding strains in March. If further measures are necessary, they will likely be discussed at April’s rate review,” another source said.

A third source echoed the view, adding that pledging to buy more corporate bonds and CP purchases, or expanding the range of assets the BOJ accepts as collateral “could be among options.”

The BOJ next meets for a rate review on April 27-28.

The central bank eased monetary policy last month by pledging to increase buying of risky assets, including corporate bonds and CP, and create a new loan programme to assist funding of small firms hit by the health crisis.

The measures came on top of government loan programmes offering small and mid-size companies zero-interest rates, which was part of a nearly $1 trillion stimulus package unveiled last week to combat the pandemic’s fallout.

Despite such measures, BOJ Governor Haruhiko Kuroda warned last week that corporate funding strains were worsening as the pandemic keeps the economic outlook “extremely uncertain.”

Travel bans and social distancing policies to combat the health crisis have added to woes for Japan’s economy already on the cusp of recession.