BOJ's board's Sato sought stronger easing stance - Oct 30 minutes
By Stanley White | November 26, 2012 12:42 PM EST
Bank of Japan board member Takehiro Sato proposed a stronger commitment to monetary easing by linking policy more closely to a rise in consumer prices in an unsuccessful bid to shift the balance of the board to a more activist stance on monetary expansion.
Sato also suggested at a policy meeting last month that the BOJ give up its view that in fiscal 2014 inflation will approach 1 percent, which is the central bank's goal for price stability in the medium- to long-term, according to minutes from the BOJ's October 30 policy meeting.
Fellow board member Takahide Kiuchi was alone in his support for Sato's proposal, the minutes noted, showing their views lacked broad support.
"A few members raised the issue of whether it was possible to further exert influence on interest rates and demonstrate the BOJ's clearer stance on monetary easing by changing the current wording," the minutes showed on Monday.
"Most members expressed a cautious view regarding making changes to the wording of the policy commitment at this point."
However, since the BOJ meeting opposition leader Shinzo Abe has put BOJ policy at the centre of an election next month by calling for much more aggressive monetary measures, including a commitment to an inflation target of 2 percent to overcome deflation, with a change to the BOJ's governing law.
Sato proposed that the BOJ should say it will maintain ultra-easy policy until a 1 percent rise in consumer prices has been maintained, which is stronger that the BOJ's current commitment to maintain strong monetary stimulus until 1 percent inflation can be forecast.
The BOJ increased its asset-buying and lending programme, its main monetary easing tool, by 11 trillion yen (83.2 billion pounds), to 91 trillion yen at the meeting on October 30.
It also unveiled a plan to supply banks with unlimited cheap long-term funds under a new scheme initially seen sized around 15 trillion yen.
The minutes also showed members agreed that the economy is likely to pick up in fiscal 2013 from its current lull as overseas economies recover.
(Editing by Edmund Klamann and Eric Meijer)
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