Bank of Japan Gov. Masaaki Shirakawa escalated pressure on Prime Minister Yukio Hatoyama to contain the world's largest debt with a warning that investor "trust" won't be assured in the aftermath of Greece's budget woes.
"It's important to gain the trust of financial markets by showing a path for fiscal consolidation," Shirakawa said in Tokyo on Thursday. He spoke after the BOJ Policy Board kept interest rates, the level of its government-bond purchases, and bank-lending programs unchanged.
Shirakawa's remarks reflect his concern that increasing the BOJ's debt purchases risks giving investors the impression that it is willing to fund fiscal expansion.