• Kyodo News


Prime Minister Yukio Hatoyama and Bank of Japan Gov. Masaaki Shirakawa agreed Friday to meet every three months or so to make further efforts to overcome the nation’s prolonged deflation.

Finance Minister Naoto Kan, who also took part in Friday’s meeting between Hatoyama and Shirakawa at the prime minister’s office, told reporters after the talks, “What we decided is to hold this kind of meeting about once every three months.”

Shirakawa said they exchanged opinions on the economic and financial conditions, denying that the government made a policy request to the BOJ during the meeting.

“I do not think there is a gap in our basic views on the economic and financial conditions,” Shirakawa said after the 1 1/2 hour meeting.

Regular meetings between the prime minister and the BOJ governor had been stalled since the Democratic Party of Japan-led government, which came to power last September, scrapped the Council on Fiscal and Economic Policy, a key panel under the previous governments led by the long-ruling Liberal Democratic Party.

Hatoyama and Shirakawa last met officially on Dec. 2, in the wake of the yen’s upsurge to a 14-year high against the dollar amid heightening concerns over debt problems in Dubai.

In the face of escalating political pressure from the government to do more to defeat deflation, the BOJ decided in March to double a three-month loan program to banks. In its latest policy review earlier this week, the BOJ held off on a new easing move and kept its key interest rate on hold at a razor-thin 0.1 percent.

Kan told reporters Friday morning before the meeting between Hatoyama and Shirakawa that the government and the BOJ have shared the goal of fighting deflation and their coordinated efforts have started to bear fruit.

“The government’s economic steps and the BOJ’s monetary policies have been harmonized,” Kan said. “That is, for instance, leading the yen to weaken and it is moving in a favorable direction for the business community.”

The central bank said in a report released in January that Japan is expected to experience deflation for at least three years through fiscal 2011, which ends in March 2012.

BOJ Deputy Gov. Hirohide Yamaguchi and Chief Cabinet Secretary Hirofumi Hirano also took part in Friday’s meeting.

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