TOKYO (MNI) – Japan’s new Finance Minister, Koriki Jojima, said on
Tuesday that “careful discussion is needed” before revising the law and
allowing the Bank of Japan to buy foreign bonds as a way of helping ease
the yen’s rise.
He was asked about remarks made by new Economic and Fiscal Policy
Minister Seiji Maehara, who also joined the cabinet after a reshuffle on
Monday, that BOJ’s buying of foreign bonds could be an effective way of
monetary easing.
Bank of Japan Governor Masaaki Shirakawa has shrugged off calls
from some politicians on the BOJ to buy foreign bonds, noting such
action would be “identical to intervention in foreign exchange markets.”
It is stipulated in the law that the BOJ should act as an agent for
the Ministry of Finance, which orchestrates Japan’s currency
intervention for the purpose of stabilizing the yen’s value, Shirakawa
said in a speech last month.
Jojima also told reporters that “it is too early to judge” whether
the government needs to compile a supplementary budget to support the
economy amid global slowdown.
The government will consider carefully whether Japan should extend
its currency swap agreement with South Korea amid a long-standing
bilateral territorial dispute.
Last year, Tokyo and Seoul increased the currency swap agreement to
$70 billion from $13 billion to ensure South Korea had ample dollar
funds amid global financial market turmoil caused by the European debt
and political crisis.
The temporary increase is effective until the end of October.
tkeditorial@marketnews.com
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