Divisions are appearing in the ruling Democratic Party of Japan over the proposal for the central bank to purchase foreign currency bonds a week before policymakers meet to assess whether to apply more stimulus.
DPJ policy chief Seiji Maehara told reporters Thursday in Tokyo that it would be "desirable" for the government and the Bank of Japan to reach an agreement allowing the central bank to buy foreign securities. Earlier this week, however, Finance Minister Jun Azumi told lawmakers that purchases akin to intervention in the foreign currency market would be inappropriate.
The comments indicate debate on the proposal is growing within the ruling party, just months after former BOJ Deputy Gov. Kazumasa Iwata advocated a ¥50 trillion initiative to combat the yen's gains through the acquisition of foreign debt. The Finance Ministry is in charge of currency intervention moves, and BOJ stimulus moves focus on purchases of Japanese government bonds.