Japan’s Economy Minister Seiji Maehara said he will attend a central bank policy meeting tomorrow, the first cabinet minister to do so in nearly a decade, as he presses for more easing.
“I am preparing to attend,” Maehara, 50, said in a group interview in Tokyo today, without commenting on what he’ll say at the meeting. “I want to go as often as possible.”
While the BOJ is projected to leave policy unchanged at the two-day meeting ending tomorrow, Maehara’s move ratchets up pressure on the bank to do more to spur the world’s third- largest economy. Morgan Stanley and BNP Paribas forecast two straight quarters of contraction through year-end, and the minister’s efforts may boost expectations for easing at the next gathering on Oct. 30.
“He’s hoping his attendance will make a difference,” said Masamichi Adachi, a senior economist at JPMorgan Securities in Tokyo and a former central bank official. “It will probably have a limited impact. If the BOJ acts on the day a high-ranking politician comes to the meeting, it will make people think the BOJ is affected by political pressure.”
Earlier this week, Maehara suggested that the bank could buy foreign bonds as one easing option, and vowed closer scrutiny to ensure it meets its 1 percent inflation target. Maehara said today that purchases of overseas debt by the bank are a tool for monetary adjustment, not currency intervention.
“I hope the BOJ will pursue powerful monetary easing to achieve its Feb. 14 pledge of 1 percent price goal as soon as possible,” Maehara said today.
When asked today about possible extra policy options beside foreign bond purchases, he declined to comment, saying the BOJ must decide. Monetary tools will be decided by the central bank, “taking the BOJ’s independence into account, after discussions with the government,” he said.
A BOJ spokesman said that Maehara’s attendance at the meeting tomorrow would be the first by a government minister since former Economic and Fiscal Policy Minister Heizo Takenaka on April 8, 2003. At that meeting, the BOJ left policy unchanged before deciding to add more cash to the economy at a gathering later that month.
Senior finance ministry and cabinet office officials normally attend BOJ meetings, with four vice-ministers present at the most recent Sept. 18-19 gathering.
None of 20 economists surveyed by Bloomberg News expect the BOJ to take further easing measures tomorrow. Nomura Securities Co., RBS Securities Japan Ltd., and Citigroup Inc. are among those forecasting more stimulus at the bank’s meeting on Oct. 30.
The BOJ last month unexpectedly expanded its asset-purchase fund by 10 trillion yen ($127 billion), seeking to counter the yen’s advance and stem economic contraction.
With the action, the BOJ joined counterparts from the Federal Reserve to the European Central Bank in taking steps to address persistent risks to growth, five years after the U.S. mortgage meltdown derailed the global economy.
Newly appointed Finance Minister Koriki Jojima said that foreign asset purchases would “require cautious handling and consideration,” suggesting he may have less enthusiasm for the idea than Maehara.
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