TOKYO (MNI) – Economic and Fiscal Policy Minister Seiji Maehara on
Friday said he wants the Bank of Japan to conduct what it calls
“powerful monetary easing” in order to help the economy overcome years
of deflation.

He also told reporters that now he is a member of the cabinet, he
cannot press ahead with his demand that the BOJ buy foreign bonds
without seeking government consensus, compared to the time when he was a
senior policymaker at the ruling Democratic Party of Japan.

Maehara is scheduled to attend the BOJ’s policy board meeting on
Friday, expressing his views as an observer toward the end of the
two-day policy-setting meeting.

“I will attend the meeting, from the viewpoint that we want to see
powerful easing in order to end deflation,” he said.

The Ministry of Finance and the Cabinet Office each sends a senior
government official to every BOJ policy meeting, usually a deputy
minister or a high-ranking bureaucrat, not a cabinet minister.

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, 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.

Finance Minister Koriki Jojima, a DPJ lawmaker 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.
** MNI Tokyo Newsroom: 81-3-6860-4822 **

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