TOKYO (MNI) – Some Bank of Japan board members cautioned that the
BOJ’s stimulus measure of increasing financial asset buying could lead
to the public notion that it is financing government spending, the
minutes of the bank’s April 27 policy meeting released Monday showed.
“A few members added that, considering that the amount of the BOJ’s
JGB purchases was becoming significantly large in scale, due attention
should be paid to preventing the BOJ’s powerful monetary easing from
being misunderstood as monetization,” the minutes said.
“On this point, members shared the view that, given that the BOJ
was pursuing powerful monetary easing in a severe fiscal situation, it
was extremely important that the credibility of fiscal sustainability in
financial markets be maintained to ensure the stimulative effects of
monetary policy, as well as maintain the stability of the financial
system and achieve sustainable economic growth.”
At the April 27 meeting, the BOJ’s policy board decided to expand
its financial asset-buying program to about Y70 trillion from Y65
trillion, as widely expected, by raising purchases of long-term Japanese
government bonds to Y29 trillion from Y19 trillion and reducing
six-month market operations.
As for outright JGB buying, the BOJ decided to extend maturities of
JGBs that it is buying under the temporary asset-buying program to one
to three years from one to two years.
The board also voted unanimously to continue the bank’s practically
zero interest rate policy, vowing to guide the economy toward a more
sustainable recovery track.
tokyo@marketnews.com
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