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Bank of Japan Gov. Masaru Hayami on Thursday brushed off political calls for the central bank to relax its monetary policy further in the face of an ailing economy.

He suggested instead that the central bank will keep its current policy intact at its two-day board meeting, which was due to start the same day.

“It’s not a situation for adding new policy measures,” Hayami told the Upper House Financial Affairs Committee.

Hayami also said he will push this same view at the policy board meeting.

Commenting on the sluggish stock market, Hayami said the recent plunge in share prices is within the range he predicted in April.

Hayami reportedly ruled out the implementation of additional monetary-easing measures as the BOJ wants to see how economic structural reforms progress under the administration of Prime Minister Junichiro Koizumi.

The BOJ also wants to assess the effects of credit-easing measures that were adopted in March.

Furthermore, there is little room left for the BOJ to take additional measures, with interest rates already near the zero mark, analysts said.

The first day of the policy board meeting was expected to focus on an assessment of the current state of the economy, laying aside monetary policy debate until Friday.

Pressure on the BOJ to further ease its ultra-easy monetary policy has been mounting since Monday, when the government reported that the nation’s gross domestic product posted a 0.2 percent contraction in the January-March quarter from the previous quarter.

Taku Yamasaki, secretary general of the Liberal Democratic Party, said Wednesday he would ask Hayami for a further relaxation in the BOJ’s monetary policy in an effort to prevent the economy from slowing even more.

Yamasaki said banks’ writeoffs of their bad loans is a top priority under the structural reform program advocated by Koizumi, but that these efforts will be accompanied by deflationary pressures.

Finance Minister Masajuro Shiokawa expressed hope that the BOJ would implement some monetary easing measures to support the nation’s fragile economy.

The BOJ adopted a policy of quantitative easing on March 19 by shifting its monetary policy target from the unsecured overnight call rate to the balance of funds held in current accounts at the central bank, effectively resuming its zero-interest-rate policy.

The central bank currently targets the outstanding balance of current accounts at around 5 trillion yen, and has said it will provide greater liquidity if there is a risk of instability on the financial markets.

The Bank of Japan is unlikely to decide to increase this target amount as it has not yet fully assessed the impact of its initial policy on the economy, analysts said.

As a further monetary-easing measure, the BOJ could increase its outright purchases of Japanese government bonds from the current 400 billion yen per month.

Some analysts say, however, that a course of this kind would not be pursued at present, with the central bank still monitoring the progress of the government’s economic structural reforms.

Although the BOJ decided at its March 19 meeting that it would, if necessary, increase its outright purchases, it has not actually moved on this decision.

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