Tokyo, January 22:

Bank of Japan Governor Toshihiko Fukui called Monday on Asia’s monetary authorities to forge closer ties to limit the impact of massive money flows into the region. “To increase the ability to absorb external shocks from massive capital flows, the priority seems to (be to) strengthen the function of foreign exchange and financial markets in the region as a whole,” Fukui said.

Exchanging information will “contribute to addressing risks and vulnerabilities in the markets,” he added. He was speaking at a symposium bringing together a number of Asian central bank chiefs to mark 10 years after the Asian financial crisis.

The crisis was triggered by a plunge in the Thai baht in 1997, battering much of the region. It prompted Asia’s monetary authorities to boost cooperation in handling speculative moves of

foreign exchange rates. The baht briefly nosedived again last month after Thailand’s military-installed government imposed draconian capital controls.

Fukui said that 10 years after the financial crisis, “financial markets are much more stable and the currencies sometimes face upward rather than downward pressure.” “With the globalization of the world’s financial markets, large capital flows will continue to have a strong impact on open economies,” Fukui said.

“It is, and will surely be, the most difficult task for any monetary authorities to maintain the stability of foreign exchange rates, the free flow of capital, and the independence of monetary policy simultaneously,” Fukui said.

The Bank of Japan itself has come under criticism after last week keeping super-low interest rates on hold in the face of government pressure.