BOJ should show resolve for "unlimited" easing: LDP official

TOKYO Thu Dec 20, 2012 8:51am IST

A man walks past the Bank of Japan headquarters in Tokyo December 19, 2012. REUTERS/Yuriko Nakao

A man walks past the Bank of Japan headquarters in Tokyo December 19, 2012.

Credit: Reuters/Yuriko Nakao

Related Topics

TOKYO (Reuters) - The Bank of Japan has already shown its readiness to keep an ultra loose monetary policy but stressing its resolve to ease "unlimitedly" would make a difference, a senior Liberal Democratic Party (LDP) official said on Thursday.

"What's important is to encourage private investment through easy monetary policy," said Hiroyuki Hosoda, chairman of the LDP's general council told Reuters.

However, Hosoda added that the LDP is not implying that the central bank should buy government bonds recklessly or intentionally create unwelcome inflation by setting a price target.

The BOJ meets for the second day of its policy-setting meeting on Thursday, when it is expected to ease monetary policy further via an increase in asset purchases.

There are limits to how much the government can spend to revive the economy, Hosoda said, adding that any increase in public works spending - together with BOJ monetary easing - would be aimed more at improving business sentiment and encouraging companies to increase investment.

Shinzo Abe, head of the opposition LDP which won in a landslide in Sunday's election, has put the central bank's independence on the line by repeatedly calling for a binding 2 percent inflation target, double the BOJ's current price goal, and for buying more bonds aggressively.

Hosoda said Abe, the incoming prime minister, is expected to focus on security and defense when he meets U.S. President Barack Obama in January, rather than on whether Japan would join the Trans-Pacific Partnership free trade deal.

(Writing by Leika Kihara; Editing by Shinichi Saoshiro and Richard Borsuk)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Public Health

REUTERS SHOWCASE

Airtel Profit Jumps

Airtel Profit Jumps

Bharti Q2 net profit more than doubles   Full Article 

Maruti Earnings

Maruti Earnings

Maruti Suzuki net profit up 29 percent, beats estimates.  Full Article 

ICICI Results

ICICI Results

ICICI Bank Q2 profit up 15 percent, beats estimates.  Full Article 

Cost Cutting

Cost Cutting

PM Narendra Modi boots officials out of the first class cabin  Full Article 

Market at Record

Market at Record

Sensex, Nifty hit record highs; reforms outpace hawkish Fed.  Full Article 

Moody's on India

Moody's on India

Moody's welcomes India's policy steps, but wants to see more.  Full Article 

End Of QE

End Of QE

U.S. Fed ends bond buying, exhibits confidence in U.S. recovery.  Full Article 

Samsung Results

Samsung Results

Smartphone woes drag Samsung Elec Q3 profit to more than 3-year low.  Full Article 

Refining Margins

Refining Margins

BPCL aims to double refining margins with refinery expansion.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage