NIIGATA (Kyodo) A Bank of Japan Policy Board member said Wednesday the BOJ shouldn’t have any preset idea on whether to end its unconventional measures to fight the global crisis, saying corporate financing could remain severe for some time.
“The environment for corporate financing may remain severe on the whole,” Seiji Nakamura said in a speech in Niigata Prefecture. “As for the measures that are to expire at the end of September, we should carefully check financial and economic conditions and study what to do with the steps without any preset idea.”
The BOJ has implemented a series of unconventional steps, including the outright purchase of corporate bonds and commercial paper, to make ample funds available to cash-strapped financial institutions and encourage them to lend more to businesses.
Nakamura said it is important to keep such “unusual” steps in place, but only up to a point.
BOJ Gov. Masaaki Shirakawa said last week the central bank will decide whether to end the corporate financing steps before the measures expire at the end of September.
As for the prospects for the economy, Nakamura, a former president of shipping firm MOL Ferry Co., said he anticipates a recovery exceeding the country’s potential growth rate in fiscal 2010, due partly to improvements overseas and various pump-priming measures.
However, uncertainty over the future is “extremely high,” and it may be hard for people to feel the recovery because economic activity has fallen so low, he said.
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