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Monday, March 15, 2010

Japan Finance Minister: Expect BOJ To Keep Working With Government Vs Deflation

By Takashi Nakamichi

Dow Jones Newswires

TOKYO -(Dow Jones)- Japanese Finance Minister Naoto Kan on Monday renewed pressure on the Bank of Japan to continue efforts to pull the country's economy out of deflation, although he acknowledged there had been domestic economic improvements.

"The (central bank) should communicate well with the government and work with it as one toward the goal of overcoming deflation, and this stance has been kept not only by the government but also by the BOJ," Kan said at a news conference. "My understanding is that the BOJ will stick to that stance from now on."

Kan added, "I believe that the government's expectations have been fully conveyed" to the central bank through recent parliamentary debates and other channels.

The comments precede the central bank's two-day policy meeting starting Tuesday. There has been growing speculation that the BOJ may increase the size of its special program to lend three-month funds at a rock-bottom 0.1% interest rate from the current amount of Y10 trillion.

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