January 9, 2013 / 11:22 AM / 5 years ago

Japan finmin urges aggressive BOJ policy to beat deflation

TOKYO, Jan 9 (Reuters) - Japanese Finance Minister Taro Aso called for aggressive measures by the Bank of Japan to beat deflation at a Wednesday meeting of a top government policy panel with legal authority to map out long-term fiscal and economic policies.

Aso also told the meeting that monetary policy alone could not resolve defaltion, urging the government to adopt fiscal measures to stimulate effective demand, according to Economics Minister Akira Amari, who attended the meeting and held a news conference afterward.

“It is important that the government and the BOJ have a dialogue at the re-instated Council on Economic and Fiscial Policy,” Aso was quoted as saying.

“I expect the BOJ to take aggressive measures.”

Amari’s news conference followed the first meeting of the Council on Economic and Fiscal Policy (CEFP) after its revival by the newly installed Liberal Democratic Party-led government.

The BOJ is under intense pressure from Prime Minister Shinzo Abe to further ease monetary policy, and will likely adopt a 2 percent inflation target at its Jan. 21-22 rate review, double its current goal, sources familiar with the central bank’s thinking told Reuters.

It will also likely issue a statement with the government pledging to pursue bold monetary easing steps, the sources said.

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