— Failure To Enact Debt Bill To Force Govt To Suspend JGB Issuance
TOKYO (MNI) – Finance Minister Koriki Jojima on Monday repeated
that the government expects the Bank of Japan to conduct “decisive
monetary easing” in order to help the economy overcome deflation.
He also told reporters that it is up the BOJ to decide on monetary
policy “in a appropriate manner by closely watching economic and market
conditions” while the government watches its action.
The BOJ is windedly expected to ease credit at its one-day policy
meeting on Tuesday amid growing downside risks to a sustained economic
recovery. The central bank stood pat on Oct. 5 after taking preemptive
action by boosting its financial asset buying on Sept. 19.
Meanwhile, Jojima warned that the government will be forced to
suspend issuance of bonds in December if parliament does not approve by
end-November a bill that would allow it to issue debt for financing
spending in fiscal 2012.
Failure to pass the bill would cause market instability, he said.
The government will re-submit the bill during the 33-day
extraordinary Diet session that begins on Monday.
In the pervious session, opposition parties, which control the upper
house of parliament, refused to debate the bill that would allow JGB
issuance for financing a large deficit in the Y90.3 trillion budget
for the current fiscal year that began on April 1.
The Ministry of Finance has said it was trimming fiscal spending by
Y3 trillion in September and will cut a further Y1 trillion in each of
October and November, but the government will still run out of money for
fiscal programs — except for essential services — at the end of
November if the debt bill is not enacted by then.
tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-6860-4820 **
[TOPICS: M$A$$$,M$J$$$,MGJ$$$,MMJBJ$]
