• Kyodo


A Bank of Japan policymaker rejected on Wednesday suggestions the central bank may be tightening its monetary policy stance in view of the sagging balance of current-account deposits.

“It is not appropriate to measure the degree of monetary policy relaxation in view” of changes in the balance of current-account deposits held by financial institutions at the central bank, Miyako Suda, a member of the BOJ’s Policy Board, told a news conference in Matsumoto, Nagano Prefecture.

“The degree of monetary policy relaxation has not undergone any change,” she said.

There is no leeway to tighten up monetary policy because the BOJ has pledged to maintain the current accommodative monetary stance until consumer prices stop falling or start a rebound, she said.

The nationwide consumer price index dropped a record 0.8 percent in fiscal 2001, down for the fourth year in a row.

Suda dismissed as “unrealistic” calls from some Diet members for the BOJ to set the goal of making prices go up by a specific percentage point.

Earlier in the day, Suda told business executives in Matsumoto that structural reform should be implemented quickly, with companies needing to expedite changes in management and banks needing to solve their bad-loan problems.

Corporate reform is necessary to strengthen capital efficiency to “enhance Japan’s potential for growth,” she said.

“The problem of nonperforming loans is one of the major issues that the Japanese economy must overcome,” she said. “(But) central to structural reform is the reform in corporate management.”

Suda pointed to the importance of corporate governance in strengthening companies’ legal, accounting and tax systems, saying proper systems are a prerequisite of efficient management and strong profits.

“If companies can push forward with structural reform and financial stability is maintained, it will lead to positive cycles of economic activity,” she said.

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