TOKYO: Japanese Prime Minister Naoto Kan and Bank of Japan (BoJ) governor Masaaki Shirakawa are likely to meet next Monday, Aug 23, a government source said, as persistent yen gains threaten to further hobble the country's slowing economy.
The meeting may be pushed forward to later this week, depending on market developments, said the source, who declined to be identified due to the sensitivity of the matter.
Kan and Shirakawa, who government sources had earlier said may meet later this week, are expected to discuss the yen's strength and possible responses, although likely options are seen as limited.
"As the government looks poised to come up with additional economic stimulus, the BoJ is likely to back this up by saying that it will persistently keep an easy policy and support growth areas with its new loan scheme," said Junko Nishioka, chief economist at RBS Securities.
"Even if the BoJ does not take new initiatives, the Kan-Shirakawa meeting will effectively be a form of verbal intervention to halt the yen's rise, as with last week's remarks from the finance minister and Shirakawa."
Policymakers have tried hard to talk down the yen after it surged to a 15-year high against the dollar last week, adding to their headaches as they grapple with deflation and slowing growth in Japan's major export destinations such as the United States and China.
The yen remained within sight of its 15-year high against the dollar on Tuesday, keeping pressure on the government and the BoJ for fresh action to ease the pain from the strong yen on Japan's export-reliant economy.
Kan has said the yen's sudden rise against the dollar had become a concern and he would continue to watch it carefully, but has given few clues on whether and when he will meet Shirakawa.
The government has started considering additional steps to support the fragile economy, which may include extending the year-end deadline on subsidies for household purchases of energy-efficient consumer electronics, the Nikkei newspaper said on Tuesday.
The BoJ is worried about the impact the strong yen could have on business sentiment but is likely to stand pat, unless the dollar falls at a pace of ''2 to ''3 in a single day and heads towards its all-time low below ''80 (RM2.97). The dollar is now hovering around ''85.30. ' Reuters
The meeting may be pushed forward to later this week, depending on market developments, said the source, who declined to be identified due to the sensitivity of the matter.
Kan and Shirakawa, who government sources had earlier said may meet later this week, are expected to discuss the yen's strength and possible responses, although likely options are seen as limited.
"As the government looks poised to come up with additional economic stimulus, the BoJ is likely to back this up by saying that it will persistently keep an easy policy and support growth areas with its new loan scheme," said Junko Nishioka, chief economist at RBS Securities.
"Even if the BoJ does not take new initiatives, the Kan-Shirakawa meeting will effectively be a form of verbal intervention to halt the yen's rise, as with last week's remarks from the finance minister and Shirakawa."
Policymakers have tried hard to talk down the yen after it surged to a 15-year high against the dollar last week, adding to their headaches as they grapple with deflation and slowing growth in Japan's major export destinations such as the United States and China.
The yen remained within sight of its 15-year high against the dollar on Tuesday, keeping pressure on the government and the BoJ for fresh action to ease the pain from the strong yen on Japan's export-reliant economy.
Kan has said the yen's sudden rise against the dollar had become a concern and he would continue to watch it carefully, but has given few clues on whether and when he will meet Shirakawa.
The government has started considering additional steps to support the fragile economy, which may include extending the year-end deadline on subsidies for household purchases of energy-efficient consumer electronics, the Nikkei newspaper said on Tuesday.
The BoJ is worried about the impact the strong yen could have on business sentiment but is likely to stand pat, unless the dollar falls at a pace of ''2 to ''3 in a single day and heads towards its all-time low below ''80 (RM2.97). The dollar is now hovering around ''85.30. ' Reuters
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