TOKYO (MNI) – Economic and Fiscal Policy Minister Seiji Maehara on
Thursday renewed his call on the Bank of Japan to conduct further
monetary easing in order to achieve its 1% price goal as soon as
possible.

“I hope the BOJ makes further efforts to achieve its 1% CPI goal
swiftly,” he told a group of reporters in an interview.

Asked what policy tools the BOJ should use to hit the target,
Maehara said, “It will be determined by the BOJ, given its
independence.”

In February, the BOJ board adopted a more explicit ‘goal’ to guide
consumer inflation toward 1% in the longer term. It has raised the
target for its financial asset buying to Y80 trillion through three
increases this year.

The central bank has also vowed to maintain practically zero
interest rates until it sees a clearer prospect for a stable 1%
year-on-year rise in the consumer price index.

Maehara said he plans to attend the BOJ’s policy board meeting as
an observer on Friday and “will express our ministry’s viewpoint and my
opinion.”

He declined to say what demands he will make on the last day of the
bank’s two-day policy-setting meeting.

The BOJ board is expected to stand pat at the meeting as it already
eased credit further only about two weeks ago by increasing Japanese
government bond buying.

Maehara, who took office after a cabinet reshuffle on Monday, has
repeatedly urged the BOJ to conduct bold policy measures in order to
help Japan overcome years of deflation, including purchases of foreign
bonds by the central bank, which in theory can ease the yen’s rise
against other currencies.

During the interview, he said the BOJ could use foreign bond buying
as a way of increasing fund injections.

Meanwhile, BOJ Governor Masaaki Shirakawa has shrugged off calls
from some politicians on the BOJ to buy foreign bonds, noting such
action would be “identical to intervention in foreign exchange markets.”

It is stipulated in the law that the BOJ should act as an agent for
the Ministry of Finance, which orchestrates Japan’s currency
intervention for the purpose of stabilizing the yen’s value, he said in
a speech last month.

Finance Minister Koriki Jojima, who also joined the cabinet on
Monday, said this week that the government needs to be cautious about
considering whether to revise the law and allow the BOJ to buy foreign
bonds.

tokyo@mni-news.com
** MNI Tokyo Newsroom: 81-3-6860-4822 **

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