Japan's central bank holds policy meeting amid calls for easing

The government, meanwhile, lobbied for more action by the Bank of Japan to ease monetary policy to help the recession-struck economy escape from years of falling prices known as deflation.

Trade minister Toshimitsu Motegi told reporters the government is determined that the central bank set a 2-percent target for inflation.

“We want a clear inflation target to aim for,” Motegi said. “Other countries have inflation targets, and it's not just 1 percent. They are all at least 2 percent,” he said.

Motegi said the monetary easing so far has been “inadequate.”

Since taking office in December, Prime Minister Shinzo Abe has pushed ahead with campaign promises to seek a more aggressive approach to ending a deflationary slump that has persisted for two decades.

Apart from trillions of yen (hundreds of billions of U.S. dollars) in stimulus spending, the government has insisted the central bank also expand its monetary easing. Since interest rates have been near zero for years, the most likely option is increased asset purchases to help encourage bank lending.

The Abe government is likely to nominate as Bank of Japan governor an expert known to favor its policies when the term of the current governor, Masaaki Shirakawa, ends this spring.

However, Motegi rejected accusations that the government's demands are meant to erode the central bank's independent status.

“We are not doing this to gang up and pick on Mr. Shirakawa,” he said. But he added that “the policy of aiming to escape deflation will not change, not today, not tomorrow or the day after tomorrow.”

He said the government would leave it up to the central bank to decide what measures to adopt, while insisting something more be done.

Critics of the government's strategy of pushing for more inflation argue that it will do little to stimulate real demand in the economy if it pushes up prices without accompanying gains in purchasing power.

SHARE CLOSE
Blogger		Google+
Live Journal		Plurk
Stumble Upon

Tweet

	PREVIOUS ARTICLE
	Investigators look into Boeing 787 battery maker following emergency

NEXT ARTICLE
Profits for Chinese tech behemoth Huawei rose 33 percent last year

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

 Receive China Post promos
 Respond to this email

Submit