Bank of Japan Governor Masaaki Shirakawa on Monday defended the central bank’s monetary policy, saying it has helped stem the yen’s rise and that more efforts by the government are important in combating deflation.
Shirakawa’s remarks came at a time when debate over the BOJ’s handling of Japan’s flagging economy is heating up ahead of the Dec. 16 general election, with Shinzo Abe, leader of the opposition Liberal Democratic Party, calling for more aggressive monetary easing.
But the governor rejected Abe’s view that the bank’s monetary easing is not enough, in his speech in Nagoya, where he met local business leaders, noting that the monetary base, the amount of money supplied by a central bank, has been “more or less the same” as in Europe and the United States.
The BOJ’s monetary easing including financial asset purchases, coupled with the government’s yen-selling intervention, “has fended off the yen’s appreciation to some extent,” Shirakawa said.
He also stressed the need for efforts on the government’s part to boost the economy, saying, “It is really important for the government — through measures such as decisive deregulation — to raise the attractiveness of domestic investment and lay the foundations that encourage firms to be adventurous.”
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