BOJ eases policy in split vote amid govt pressure

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TOKYO, March 17 (BestGrowthStock) – The Bank of Japan eased monetary
policy further on Wednesday as expected after a drumbeat of
government pressure for fresh action to beat deflation, but the
split vote suggests the board may have had difficulty justifying
the move.

The central bank, in a 5-2 vote, decided to expand the scale
of a fund supply tool it adopted in December to 20 trillion yen
from 10 trillion yen, and the duration of the fixed-rate loans
was left at three months. Board members Tadao Noda and Miyako
Suda opposed the move.

The bank’s main policy rate was kept on hold at 0.1 percent
by a unanimous vote, as widely expected. The central bank also
maintained its commitment to keep monetary conditions very easy
and to do its utmost to beat deflation.

BOJ Governor Masaaki Shirakawa will hold an embargoed news
conference later, with his comments expected to come out around
4:15 p.m. (0715 GMT).

The government, hobbled by a ballooning fiscal debt, has been
pressuring the BOJ to support a fragile economy even as most
other major central banks mull rolling back stimulus steps put in
place during the global crisis.

The yield curve has steepened and the yen has weakened
against the dollar since a newspaper report earlier this month
fueled expectations that the BOJ will ease policy in March.

Under pressure from the government, the BOJ in December put
in place a new fund-supply operation at which it extends a
combined 10 trillion yen in three-month loans to banks at the
policy rate of 0.1 percent.
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(Reporting by Leika Kihara; Editing by Hugh Lawson)

BOJ eases policy in split vote amid govt pressure