Naoshima: Expect BOJ to Take Further Monetary Steps To Fight Deflation

Naoshima: Expect BOJ to Take Further Monetary Steps To Fight Deflation

Japan’s Economy, Trade and Industry Minister Masayuki Naoshima said Wednesday that he expects the Bank of Japan to take further monetary steps to fight deflation shortly after the government and the central bank intervened in the currency market for the first time in more than six years, Kyodo News reported.

“In terms of stepping up cooperation between the government and the BOJ, and especially to show our strong resolve to end deflation, I expect more monetary policies from the BOJ,” Naoshima told reporters in Tokyo.

He also stressed that the market intervention was in line with the government’s policy, approved by the Cabinet on Friday, to “take decisive actions, including intervention, when necessary” to stem theY’s rise against major currencies.

“I think there was a strong impact on the market in the sense that the Japanese government made its will clear,” he added.

The policy was stipulated in the new stimulus package the government compiled to tackle the recent upsurge of theY and downside risks to Japan’s economic growth.

Asked about what the government would like the U.S. dollar-yen exchange rate to be, Naoshima said while it is difficult to tell, the assumed rate level among Japanese companies is 90Y to the dollar and the point is how “one thinks about the gap.”

http://www.Intermoney.org – Market Talk

Wednesday. September 15, 2010