FACTBOX-Recent policymaker quotes on BOJ

(For more stories on the Japanese economy, click [ID:nECONJP])

TOKYO, Jan 25 (BestGrowthStock) – The Bank of Japan may say on
Tuesday that there is less chance of the country slipping back
into recession, but it remains ready to ease policy again in
future to appease the government if the economy takes a turn for
the worse.

The central bank is set to keep interest rates at 0.1 percent
and will hold off on new initiatives, having introduced a new
funding operation last month after a period of intense government
pressure for action to support the fragile economy.

Following are recent key quotes by BOJ and Japanese
government officials on monetary policy and the economy:

FINANCE MINISTER NAOTO KAN, Jan 22, in parliament:

“The government would be going too far if it were to say
specifically what kind of monetary policy the BOJ should take.”

He said the government and the BOJ were working well with
each other in beating deflation. [ID:nTOE60L084]

BOJ GOVERNOR MASAAKI SHIRAKAWA, Jan 20, in meeting with
ministers:

Shirakawa told cabinet ministers that corporate fund demand
remains weak, particularly at small firms which are reluctant to
spend capital, according to a senior government official.

Shirakawa made the remark in response to questions about
small firms from Banking Minister Shizuka Kamei, a harsh critic
of the central bank. Kamei and other ministers did not ask the
governor for specific policy actions, the official said.
[ID:nTKB006672]

PRIME MINISTER YUKIO HATOYAMA, Jan 20, in parliament:

“The government and the BOJ will work as one and guide policy
appropriately and flexibly.” [ID:nTKF106804]

SHIRAKAWA, Jan 18, in speech to the bank’s branch managers:

“The BOJ recognises that it’s very important for Japan’s
economy to pull out of deflation and return to sustainable growth
with price stability.”

He also said the bank will maintain easy monetary conditions.
[ID:nTOE60H011]

KAN, Jan 14, in a news conference:

“The BOJ has a lot of experience and authority (in monetary
policy), and I want to work with it while keeping in close
communication. And I believe we are working well with each other
at the moment.” [ID:nTOE60D04W]

SHIRAKAWA, Dec 24, in a speech at Japan’s top business lobby:

Shirakawa repeated that the bank will act promptly and
decisively if financial markets destabilise. [ID:nTKX006612]

SHIRAKAWA, Dec 22, in speech to securities brokers

“Price stability is an extremely important policy objective
for a central bank, but if a central bank conducts monetary
policy just by watching short-term price developments, this may
induce large economic fluctuations and result in harming price
stability in the medium to long term.” [ID:nTOE5BL089]

SHIRAKAWA, Dec 21, in a TV programme

“We will patiently maintain the current effective zero
interest rates in order to improve supply-demand balance in the
economy.”

“What we have to fear the most is a vicious cycle of falls in
prices and deterioration in the economy. To prevent that, we need
to provide ample funds and maintain stability in the financial
system. We are always ready to act promptly and decisively if
necessary.” [ID:nTOE5BK0A7]

SHIRAKAWA, Dec 18, after the bank said in a statement that it
would not tolerate zero inflation or falling prices:

“There were questions as to whether the BOJ accepted
deflation or falling prices. We felt we should change the
language used to define our understanding of price stability to
express our views more clearly.

“What I heard from other policy board members today is that
this change in the language doesn’t represent a change in
thinking among board members about our understanding of price
stability.” [ID:nTOE5BH056]

THEN-NATIONAL STRATEGY MINISTER NAOTO KAN, Dec 18, after
BOJ’s policy meeting:

“The BOJ is basically saying a 1 percent rise in prices is
desirable, and this can be understood as a type of inflation
target.

“I have no intention of saying the BOJ shouldn’t do anything
more. The BOJ’s understanding of price stability shows it will
actively take measures to eliminate any perception that it
tolerates deflation. The steps the BOJ took at its extra meeting
this month (to start a new funding operation) show it is working
in tandem with the government.” [ID:nT289621]

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(Reporting by Tokyo Economic Policy Desk)

FACTBOX-Recent policymaker quotes on BOJ