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BOJ does not signal monetary easing in advance - Amari
January 26, 2016 / 1:34 AM / 2 years ago

BOJ does not signal monetary easing in advance - Amari

TOKYO (Reuters) - Japanese Economy Minister Akira Amari said on Tuesday that the Bank of Japan does not signal in advance whether it will ease monetary policy, when asked about the chance of additional easing this week.

Akira Amari, Japan's Minister for Economic Revitalization and Minister for Economic and Fiscal Policy, attends the session 'Japan's Future Economy' during the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland January 23, 2016. REUTERS/Ruben Sprich

Amari contrasted the BOJ with the European Central Bank, saying he did not think the BOJ would communicate its intentions to markets in the way ECB President Mario Draghi did when he hinted last week that he was ready to expand stimulus in March.

Amari reiterated his view that the BOJ is independent and the government should not guide monetary policy, but speculation remains that the BOJ could act this week as tumbling oil prices weigh on consumer prices.

“Communicating with markets is part of central bank policy, and I don’t think the BOJ would transmit their intentions in advance,” Amari said.

“The ECB’s style is quite bold, but I don’t think the BOJ would adopt this approach.”

Markets are simmering with speculation the BOJ may expand stimulus at a meeting ending Friday, as the effects of slumping oil prices were likely to force the BOJ to cut its inflation forecast for the coming fiscal year below 1 percent, sources told Reuters.

A sell-off in Japanese shares and a rise in the yen could also prompt the BOJ to act as these market moves threaten to damage corporate sentiment, some economists say.

The BOJ aims to meet its 2 percent inflation target around the second half of fiscal 2016, but this timing is looking increasingly unrealistic as oil prices continue to fall.

Since launching quantitative easing in 2013, the BOJ has delayed its inflation target three times due to weak consumer spending and the deflationary impact from a global rout in oil prices.

Reporting by Stanley White; Editing by Chris Gallagher and Eric Meijer

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