Bank of Japan policymakers agreed at their April 30 meeting that the central bank should avoid “excessive involvement” in corporate activity, if and when its planned new measure to bolster Japan’s growth potential is put into place, its minutes showed Wednesday.
The discussion reflects the BOJ’s intention to be careful in devising the new measure, which is aimed at encouraging private banks to funnel more lending into growth industries. It is rare for the BOJ to launch a lending program for banks targeting specific areas.
Members agreed the new measure should be examined “by taking account of . . . avoiding the bank’s excessive involvement in microeconomic resource allocation among individual firms,” the minutes said.
The BOJ compiled the outline of the lending measure at its policy meeting on May 21. Under the plan, loans would be extended to private-sector banks basically for one year at an annual interest rate of around 0.1 percent, the same as the central bank’s key policy rate.
The minutes also showed the members of the BOJ Policy Board agreed the new measure should “prevent any constraint on the regular conduct of monetary policy” and the central bank’s financial health should be ensured.
The BOJ is expected to work out the details of the new measure possibly in June.
As for the outlook of the global economy, some BOJ policymakers said global financial developments, particularly those related to the Greece debt issue, may serve as a negative factor.
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