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Japan finance chief won't pressure central bank

He did not favour intervening in currency markets or pressuring the central bank to commit itself to targeting a particular level of inflation. -AFP

Wed, Jun 09, 2010
AFP

TOKYO, JAPAN - Japanese Finance Minister Yoshihiko Noda said Wednesday he would not pressure the Bank of Japan to step up its anti-deflation efforts, marking a different approach to his combative predecessor Naoto Kan.

The newly appointed finance minister said he did not favour intervening in currency markets or pressuring the central bank to commit itself to targeting a particular level of inflation, Dow Jones Newswires reported.

Noda's remarks suggest his approach toward the goal of ending deflation may be more restrained than that of Kan, now prime minister, who openly called for a weaker yen and often heaped pressure on central bankers.

His comments come as Japan's new government puts fiscal discipline at the heart of its agenda in bid to repair the country's tattered finances and slash the world's biggest debt pile.

Crippling deflation and weak domestic demand continue to weigh on growth as consumers defer purchases, while Japanese exporters driving the country's recovery from recession are seeing overseas profits eroded by a stronger yen.

Noda said that former finance minister Hirohisa Fujii, despite his repeated objection to competitive currency devaluation, "did not mean to guide exchange rates in any particular direction, and my position is the same".

He also maintained Japan's official line on foreign exchange policy, suggesting he currently sees little need for action to curb the yen's recent strength, particularly against the euro.

"Excessive fluctuation or disorderly movement has a negative impact on the stability of economies and financial markets, and based on this fundamental criterion for judgment, I will closely monitor the markets," he said.

Noda said he was satisfied with current monetary policy, including the Bank of Japan's ultra-low key rate of 0.1 percent and steps to boost lending.

"We greatly share a sense of what the problems are, and I believe that monetary policy has been handled in an appropriate, flexible manner". --AFP

 
 
 
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