LDP's Yamasaki says expects more steps from BOJ

Source: Reuters

The secretary general of Japan's ruling Liberal Democratic Party (LDP), Taku Yamasaki, said on Wednesday 16 April he believes the Bank of Japan (BOJ) will adopt additional steps to help boost the economy.

He also said relations between the government and the central bank, often strained in recent years, had improved.

"Communications between us have recently gone very well," Yamasaki told a news conference.

"I think there could be additional policy steps from the BOJ. They have done things like (on) commercial paper, but I think there will be more."

At a policy meeting that ended on April 8, the BOJ rejected government calls for a loosening of its existing monetary policy but signalled it was ready to take a new approach to the economy's problems by easing funding for cash-starved firms.

It said it would examine buying asset-backed securities (ABS), mainly from small and medium-sized companies, to help develop a funding market for such firms which have been hardest hit by a paralysis in the banking sector.

The plan to buy ABS, which would include asset-backed commercial paper (ABCP), represents a change in BOJ thinking but is consistent with the cautious approach of the bank's new governor, Toshihiko Fukui, who was appointed to the job in March.

The BOJ's next policy meeting is scheduled for April 30.