Thursday, August 26, 2010

Japan govt econ plan to call for BOJ easing - media

TOKYO: Japan's government will urge the Bank of Japan to ease monetary policy further to help salve the pain to the economy from a strong yen, as part of a package of steps to boost growth, the Asahi newspaper said on Thursday, Aug 26.

The government package, expected to be outlined by the end of this month, will stress the need to work increasingly closely with the central bank to deal with rapid rises in the yen that are harming the slowing economy, the paper said.

It will call for more action by the BOJ, saying it "hopes (the central bank) makes its utmost effort" to beat deflation, the paper quoted a draft of the package as saying.

Japanese policymakers have scrambled to talk down the yen, which rose to a fresh 15-year high against the dollar on Tuesday and threatens an export-reliant economy that is already showing signs of moderating.

Prime Minister Naoto Kan is mapping out a series of steps to support growth, such as extending the deadline for subsidies on purchases of energy-efficient electronics.

That is putting pressure on the BOJ to do its part to help the economy.

The BOJ is considering easing monetary policy further at its next rate review on Sept. 6-7 or earlier, with the most likely option an expansion of its cheap fixed-rate loan programme for banks put in place in December, sources said. - Reuters

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