TOKYO (MNI) – One Bank of Japan board member said at the March
12-13 policy-setting meeting that the BOJ needs to further clarify its
policy stance of overcoming years of deflation by increasing the scale
of the asset-buying program, the minutes released by the BOJ on Friday
showed.

“One member noted that, in a situation where a correction in the
yen’s appreciation and a pick-up in stock prices were being observed, it
was desirable to help engender potential demand, such as with regard to
firms’ business fixed investment, by further spreading the understanding
of the BOJ’s policy stance-which was clarified at the previous
meeting — throughout the markets,” the minutes said.

The minutes didn’t disclose the name of the board member but the
member is widely regarded to be Ryuzo Miyao, who proposed to increase
the scale of the asset-buying fund at the meeting.

The minutes also said, “This member continued that, from this
viewpoint, it was appropriate to increase the total size of the
(asset-buying) program and earmark this increase for the purchases of
JGBs, as was done at the previous meeting.”

However, “Most members expressed the opinion that, considering the
current economic and price situation, it was appropriate to steadily
implement the BOJ’s decisions at the February meeting and past meetings
to increase the total size of the program through the purchase of
financial assets, and monitor the spread of their effects,” the minutes
showed.

At the meeting, the BOJ board voted unanimously to maintain
practically zero interest rates while deciding to expand its temporary
lending programs aimed at shoring up the economy’s growth potential and
supporting small businesses through commercial banks.

As a result, the total fund available through these pro-growth
lending facilities would be increased by Y2 trillion to Y5.5 trillion.

The central bank left the scale of financial asset-buying fund at
Y65 trillion after raising it from Y55 trillion the previous month.

Miyao proposed that the fund be raised further to Y70 trillion at
the meeting but his proposal was rejected by the eight other board
members.

At the latest policy-setting meeting ended on Tuesday, Miyao didn’t
propose to increase the scale of the asset-buying fund.

In June 2010, the BOJ launched a Y3 trillion loan program for banks
that are lending for or investing in growth areas. The deadline for
applying for this program has now been extended by two years to March
31, 2014, and the total sum will be raised to Y3.5 trillion.

tokyo@marketnews.com

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