Subscribe free to our newsletters via your
. Earth Science News .

BoJ starts first meeting under new Japan government
by Staff Writers
Tokyo (AFP) Jan 21, 2013

The Bank of Japan on Monday began its first policy meeting since the new premier took office with a pledge to pressure it into aggressive monetary easing to revive the long-suffering economy.

The two-day meeting is widely expected to see the central bank launch another round of easing, and bow to government demands that it set a two-percent inflation target in a bid to vanquish the deflation that has haunted the world's third largest economy for years.

If the BoJ inflates its 101 trillion yen ($1.13 trillion) asset-buying programme it will mark the first time in nearly a decade that the bank has expanded monetary policy after two consecutive policy meetings.

It would also be the BoJ's fourth major move since September after its counterparts in Europe and the US ushered in huge measures to battle slowing growth.

The programme is the BoJ's main policy tool with interest rates at near zero, but analysts are not convinced another expansion will be enough for Japan's new leader.

Daisuke Karakama, senior market economist at Mizuho Corporate Bank, said an expected 10 trillion yen boost to the programme, after an expansion of the same amount in December, "would be just an extension of what the BoJ has been doing and might not be enough to satisfy Prime Minister Abe".

National Australia Bank said the expected move would "underwhelm and probably send the (yen) higher".

Tensions have risen between BoJ policymakers and the administration of Shinzo Abe, whose Liberal Democratic Party swept national elections last month, as the hawkish leader piled on the pressure for more action from the bank.

The 58-year-old premier has openly said he would like to turf out BoJ Governor Masaaki Shirakawa, whose terms ends in April, and threatened to change a law mandating the bank's independence if it doesn't fall into line.

Japan's new finance minister, Taro Aso, has also weighed in, accusing the bank last month of being "slow in its response to deflation".

"Let's stop the mindset that 'We didn't make mistakes'... we have to take measures seriously to end deflation," he was quoted as saying in his inaugural address to finance ministry officials.

Aso, the BoJ's chief and economic revitalisation minister Akira Amari were reportedly to hold a rare joint press briefing on Tuesday.

Japan has been beset by deflation since the 1990s. It continues to hurt the economy as falling prices cut into corporate profits, leading firms to slash jobs and put off growth-generating capital investment.

It also dents demand because it encourages consumers to delay purchases in the hope of paying less later.

As part of an economic offensive, Tokyo has also unveiled a $226.5 billion stimulus plan with spending aimed at job creation, rebuilding areas hit by the 2011 quake-tsunami disaster and strengthening the military.

So-called "Abenomics" has drawn mixed reactions from economists and likely left the BoJ's board bristling.

But markets cheered, with Tokyo's benchmark Nikkei 225 index soaring in the past couple of months as investors bet the new government will make real progress on breathing life into the limp economy.

Abe's moves have also weighed on the yen which has been in steep decline on easing expectations, although it was slightly stronger Monday with the dollar at 89.55 yen and the euro buying 119.25 yen in afternoon trade.

The safe-haven Japanese currency hit record highs around 75 to the dollar in late 2011, hurting exporters who were already trying to recover from the twin disasters and a global slowdown.

The bank's meeting in December had been widely seen as a test of its resilience to outside pressure.

"Even though the BoJ should be independent from politics, it cannot ignore political pressure completely," Keiji Kanda, economist at Daiwa Institute of Research, said at the time.


Related Links
The Economy

Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks DiggDigg RedditReddit GoogleGoogle

Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

U.K. under pressure to stay in EU
London (UPI) Jan 18, 2013
Britain is under increasing direct and indirect pressure to stay within the European Union. Prime Minister David Cameron received a call from U.S. President Barack Obama urging him not to consider withdrawing from the EU, news media reported. White House aides confirmed the president had telephoned Cameron. Obama made the call just before Cameron was to make a speech in the Nethe ... read more

Canada to resettle up to 5,000 Iranian, Iraqi refugees

China factory fire hidden by thick smog: media

Allianz sticks to profit goal despite Hurricane Sandy hit

Hannover Re hit by 261-million-euro loss from Sandy

Record high radiation level found in fish: TEPCO

NASA Beams Mona Lisa to Lunar Reconnaissance Orbiter at the Moon

New surfaces repel most known liquids

Sustainable reinforcement for concrete has newly discovered benefits

Rare dolphin species threatened by big fishnets

New UMass Amherst Research Shows Fishways Have Not Helped Fish

Beijing water supply at risk?

Audit slams S. Korea's $20 bn river project

Melt ponds cause the Artic sea ice to melt more rapidly

New Antarctic geological timeline aids future sea-level predictions

Russian national park to bridge US-Russia divide

Will changes in climate wipe out mammals in Arctic and sub-Arctic areas?

Dietary shifts driving up phosphorus use

Amino Acid Studies May Aid Battle Against Citrus Greening Disease

Potential harvest of most fish stocks largely unrelated to abundance

China crash sees cats escape cooking pot

Floods ease in Jakarta, at least 11 dead

Eleven dead, two missing as floods swamp central Jakarta

Four children die in Mozambique floods

Mozambique floods kill 2, destroy homes

Eritrean troops besiege mutineers in Asmara

Mugabe calls for peace as VP Nkomo buried

Hollande, in Gulf, defends France's Mali offensive

French marines in Mali wait for orders to join the fight

DNA database not so anonymous on the Internet: study

Chimpanzees successfully play the Ultimatum Game

Gene flow from India to Australia about 4,000 years ago

Eliminating useless information important to learning, making new memories

The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement