Noda raps opposition chief Abe for threatening Bank of Japan’s independence

Kyodo

Prime Minister Yoshihiko Noda criticized the head of the largest opposition party Friday for threatening to undermine the independence of the Bank of Japan.

“If a government sets specific monetary policy measures and goals . . . there could be problems in terms of the independence of a central bank,” Noda told a press conference after he dissolved the House of Representatives for a general election on Dec. 16.

On Thursday, Liberal Democratic Party President Shinzo Abe said an LDP government would urge the BOJ to implement “unlimited” monetary easing, adding that the bank’s recent expansion of its asset purchase program is not powerful enough to boost the economy out of chronic deflation.

Abe, a former prime minister, also said the BOJ should agree with the government on targeting an annual inflation rate of 2 to 3 percent, higher than the bank’s current goal of 1 percent.

Noda’s government and the BOJ released a rare joint statement late last month, confirming the policy steps they would respectively pursue to fight deflation.

“There is no doubt the government and the BOJ must closely collaborate,” Noda said Friday. But he added: “I believe it is desirable (for the government) to . . . seek the BOJ’s timely, appropriate and decisive decisions while keeping close ties and ensuring its independence.”