UPDATE 1-Japan’s new finmin: won’t press BOJ on price target

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

* New finmin shares PM’s view inflation above 1 pct needed

* Says BOJ has taken appropriate, flexible steps on deflation

* Won’t guide currency rates in certain direction -Noda

* Says Japan to report fiscal reform plans to Toronto G20

* Govt names all-out monetary easing advocate as vice finmin
(Adds quotes, details)

By Tetsushi Kajimoto

TOKYO, June 9 (BestGrowthStock) – Japan’s new finance minister said
the government and the Bank of Japan should each do their part to
beat deflation as early as possible but that he will not press
the central bank to adopt a rigid inflation target.

Yoshihiko Noda also said he would not seek to guide currency
rates in a certain direction, while repeating a G7 stance that
rapid, disorderly moves would hurt stability in the economy and
financial markets.

“The BOJ has taken steps based on its understanding of price
stability as (inflation of above) zero to 2 percent — with a
median at 1 percent — which I think is reasonable,” Noda told
reporters in a group interview on Wednesday.

“Prime Minister (Naoto) Kan’s view is that we should achieve
above 1 percent (inflation). I share his view but that is not to
advocate inflation targeting.”

The government appointed Motohisa Ikeda, a proponent of
all-out monetary easing who has called for the BOJ to target 2
percent inflation in around 2 years, as deputy finance minister.
[ID:nTOE63F06Q]

It is unclear how the two will iron out differences in
emphasis.

As Noda’s deputy, Ikeda will have the right to attend BOJ
policy-setting meetings as one of two government representatives.
They cannot vote but can express their views and request delays
in BOJ board votes.

The BOJ has kept interest rates at 0.1 percent since late
2008, and eased monetary policy last December and again in March
by setting up and later expanding a facility offering cheap funds
to banks.

It also outlined last month a new loan programme aimed at
encouraging banks to lend more to industries with growth
potential. [ID:nSGE64K0AS]

“I think the BOJ has taken appropriate and flexible steps …
The BOJ says it will keep easy monetary conditions and that
stance is fine by me,” Noda said, suggesting he will not press
the BOJ to take further easing steps, at least for now.

“I believe we will continue to hold regular meetings with the
governor and his staff, so we will share our views further.”

The government is aiming to craft medium- to long-term fiscal
reform plans by the end of this month in a bid to reign in
Japan’s huge public debt, which is running at about 200 percent
of GDP, while facing the risk of a downgrade in its sovereign
credit rating.

“Long-term interest rates remain stable at low levels at the
moment … but we cannot be content with this forever. We must
conduct debt management with a sense of crisis while
communicating with markets to have JGBs smoothly absorbed.”

He pledged that Japan will report its fiscal reform plans to
the June 26-27 meetings of Group of 20 leaders in Toronto so as
to win international trust in its efforts to fix its debt woes.

“Our debt stock stands at the worst levels in the world, so
we must show a time frame in reducing the debt pile and win an
evaluation that Japan takes heed of the need for fiscal
discipline.”

Investment Basics
(Editing by Michael Watson)

UPDATE 1-Japan’s new finmin: won’t press BOJ on price target