New BOJ board members call for more monetary easing


Two new Bank of Japan Policy Board members called for more monetary easing at a news conference on July 24.

Economists Takahide Kiuchi, 48, from Nomura Securities Co. and Takehiro Sato, 50, from Morgan Stanley MUFG Securities Co., both appear to be taking a pro-easing stance in stark contrast to the caution of many existing members of the board.

The BOJ has said its target of an inflation rate of 1 percent would be attained in fiscal 2014, but the new members said that is unlikely as things stand.

“The BOJ should consider additional easing measures if necessary,” Kiuchi said. “It is appropriate to buy more Japanese government bonds and exchange-traded funds (ETFs).”

Sato said: “Purchases of foreign government bonds should be an option.”

As buying foreign bonds could be considered a foreign exchange intervention, BOJ Governor Masaaki Shirakawa has ruled out that possibility.

But Sato countered: “The problem will be cleared if such buying is for supplying funds.”

The BOJ Policy Board has nine members–the governor, two deputy governors and six others.

Observers believe adding two supporters of monetary easing to the board will not cause immediate changes in the BOJ’s policy as many of the seven others take a cautious line.

The government originally endorsed Ryutaro Kono, at BNP Paribas Securities (Japan) Ltd., as a Policy Board member, but his appointment failed to obtain Diet approval. Opposition parties said Kono took a negative stance toward monetary easing.

July 25, 2012

About Uy Do

Banking System Analyst, former NTT data Global Marketing Dept Senior Analyst, Banking System Risk Specialist, HR Specialist
This entry was posted in Japanese economy, Recession and tagged . Bookmark the permalink.

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