Japan's finance and economic ministers piled pressure on the Bank of Japan on Thursday to consider easing policy further, as the yen climbs back to levels that led to Tokyo to intervene heavily in currency markets last year to protect its export-reliant economy.
BOJ Deputy Governor Hirohide Yamaguchi said he saw no need to ease policy right away, but the central bank could face growing calls to offer more monetary stimulus to help exporters through any prolonged slump, even though it has limited options remaining to support the faltering economy.
"Yen buying has strengthened, led by short-term and speculative moves on the back of expectations for low interest rates in the U.S. until 2014," Finance Minister Jun Azumi told lawmakers.
"I would like the BOJ to take account of economic conditions and various factors in deciding policy, including quantitative easing."
Economics Minister Motohisa Furukawa also called on the central bank to ensure that real interest rates remain low, as the Federal Reserve's commitment to keep its nominal benchmark rate near zero for nearly three more years pushes the dollar lower against the yen.
Under the BOJ's initial round of quantitative easing, a technique it pioneered, it flooded the financial system with cash from 2001 to 2006 by targeting the size of current account deposits that commercial banks park at the central bank.
Read more at Reuters.
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