Japan’s central bank under extra pressure
(25 May 2012 – Japan) The Bank of Japan (BOJ) was asked to further ease policy by Japanese Finance Minister Jun Azumi, right before the central bank refrained from adding monetary stimulus.
"The BOJ must firmly pursue monetary easing to achieve its 1 percent inflation goal," Azumi told lawmakers in parliament in Tokyo today.
"The central bank left its asset-purchase and credit-loan programs unchanged, as anticipated by all 14 economists surveyed by Bloomberg News.
Azumi told reporters after the decision that the BOJ had already taken "drastic" steps last month when they pledged to increase their purchases of government bonds and reiterated that he hopes they will take "appropriate" policy measures.
"The BOJ already implemented drastic monetary easing measures last month," Azumi told reporters. "I expect the central bank to take appropriate steps in a timely manner."
The finance chief's call for more easing "is a reflection of most market participants and maybe even the public in Japan, in that they want the BOJ to do something to stimulate the economy," said Masaaki Kanno, chief Japan economist at JPMorgan Chase & Co. in Tokyo and a former BOJ official.
"One of the BOJ's important roles is to prevent the strengthening of the yen with further easing."
The BOJ kept its asset-purchase fund at 40 trillion yen (A$501 billion), after expanding it by 10 trillion yen last month, and a credit-lending program at 30 trillion yen, it said in a statement in Tokyo today. The policy board kept the key overnight lending rate between zero and 0.1 percent.
Fitch Ratings lowered Japan's credit rating on Tuesday and escalated pressure on the government to raise the sales tax, as the Organization for Economic Cooperation and Development warned the nation's debt is heading into "uncharted territory."
"The central bank left its asset-purchase and credit-loan programs unchanged, as anticipated by all 14 economists surveyed by Bloomberg News.
Azumi told reporters after the decision that the BOJ had already taken "drastic" steps last month when they pledged to increase their purchases of government bonds and reiterated that he hopes they will take "appropriate" policy measures.
"The BOJ already implemented drastic monetary easing measures last month," Azumi told reporters. "I expect the central bank to take appropriate steps in a timely manner."
The finance chief's call for more easing "is a reflection of most market participants and maybe even the public in Japan, in that they want the BOJ to do something to stimulate the economy," said Masaaki Kanno, chief Japan economist at JPMorgan Chase & Co. in Tokyo and a former BOJ official.
"One of the BOJ's important roles is to prevent the strengthening of the yen with further easing."
The BOJ kept its asset-purchase fund at 40 trillion yen (A$501 billion), after expanding it by 10 trillion yen last month, and a credit-lending program at 30 trillion yen, it said in a statement in Tokyo today. The policy board kept the key overnight lending rate between zero and 0.1 percent.
Fitch Ratings lowered Japan's credit rating on Tuesday and escalated pressure on the government to raise the sales tax, as the Organization for Economic Cooperation and Development warned the nation's debt is heading into "uncharted territory."
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