HIGHLIGHTS 3-BOJ’s Shirakawa hints may do more to help economy

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TOKYO, May 21 (BestGrowthStock) – Bank of Japan Governor Masaaki
Shirakawa signalled on Friday that the central bank would
consider further steps besides a new loan programme in trying to
boost the country’s potential economic growth.

Following are key quotes from Shirakawa’s news conference:

FINANCIAL MARKET MOVES

“Japan’s money market and markets for commercial paper and
corporate bonds are stable compared to European and U.S. markets

“It may take time for some European countries to regain
market confidence on fiscal conditions. During this process, we
will closely examine how the global financial markets and economy
will be affected.

“Recent market moves are somewhat rapid.

“Financial conditions in Japan continue to show signs of
easing while some severity remains. Corporate funding costs are
lowering as term interest rates are moving stably at low levels.
Many small firms say their funding conditions remain severe, but
overall the situation is easing.”

EUROPEAN DEBT WOES

“We need to watch for downside risks for the European economy
if financial market tensions heighten due to some European
countries’ fiscal reforms.

“But we maintain the view that emerging economies will lead
the global economy’s recovery and that emerging economies will
maintain strong growth based on domestic demand and the United
States will continue to recover moderately.

“The European economy is likely to have limited impacts on
the Japanese economy.

“I won’t comment on the substance of G7 and other
international meetings. But various international meetings
including teleconferences have taken place since the weekend
before last. We are keeping in close contact with each other in
exchanging opinions …

“We have agreed to continue working together to stabilise
financial systems and support economic recovery.”

FOREX

(Asked about the euro’s rebound on caution and speculation
about currency intervention, and the possibility of yen-selling
intervention:)

“It is not appropriate to comment on intervention by other
countries, and if the question is about Japan’s intervention I
won’t comment as that is a matter under the jurisdiction of the
finance minister.”

JAPAN ECONOMY

“Japan’s economy is moving in line with the (BOJ) outlook
report issued last month. The economy is starting to recover
moderately on the back of improvements in overseas economies …

“Domestic private-sector demand shows signs of a
self-sustaining recovery. GDP data for January-March showed a
recovery led by exports and consumption, and that underlined our
view.”

NEW LOAN SCHEME

“The BOJ plans to design a system for supporting a broad
range of companies in various sectors. It is taking into account
growth strategies presented by the government and industry
groups.

“The scheme will not be a permanent measure. The BOJ plans to
set a deadline.

“As it will take time for the scheme to have effects on
growth, we need to take our time in supporting banks’ efforts.

“We want to avoid intervening in how resources are
distributed to specific industries and companies.

“We have yet to set the conditions that financial
institutions need to meet for the new loans …

“The scheme doesn’t mean we have changed the way we adjust
money.”

POSSIBLE SUPPORT FOR SECURITISED PRODUCTS

“If financial institutions were to securitise their loans for
supporting economic growth, the BOJ would like to proactively
participate in developing the market for such products.

“It is also worth considering an idea of accepting such
securitised products as collateral in money market operations.”
Stock Market Analysis

(Reporting by Tetsushi Kajimoto and Rie Ishiguro; Editing by
Michael Watson)

HIGHLIGHTS 3-BOJ’s Shirakawa hints may do more to help economy