The government must dispel market perceptions that its fiscal policy is reliant on the Bank of Japan's bond buying, Finance Minister Shunichi Suzuki said Tuesday, adding that fiscal reconstruction must be prioritized after the first leadership change at the central bank in a decade.
Suzuki said during a news conference that the ministry will leave the BOJ to decide monetary policy under its new governor, Kazuo Ueda, who has expressed the view that the current monetary policy framework, including its program to keep borrowing costs at rock-bottom levels, is appropriate.
The BOJ's massive bond purchases have helped debt-ridden Japan curb debt-servicing costs, with over half of outstanding debt held by the central bank. The bank has rejected criticism that its intervention amounts to the central bank financing government spending.