Japan finance minister urges bank to help recovery
TOKYO: Japan's Finance Minister Hirohisa Fujii on Tuesday called on the central bank to help revive the world's number two economy, which has been hit by deflation and a surging yen.
He called on the Bank of Japan (BoJ), which has already slashed interest rates to a rock-bottom 0.1 percent in a bid to free up credit, to continue with 'quantitative easing' monetary policy steps.
"There is a range of ways to do quantitative easing," said Finance Minister Hirohisa Fujii, without giving further details, Kyodo News reported.
The BoJ later announced it would hold an extraordinary meeting on monetary policy at 0500 GMT, to be followed by a statement and a press conference by BoJ Governor Masaaki Shirakawa.
Central banks usually stimulate sagging economies by lowering interest rates, which frees up credit for investment.
But when rates are at or near zero, they can use quantitative easing -- typically buying bonds and other assets from banks -- to pump capital into the financial system.
The central bank said in October it would halt some of its emergency measures at the end of the year despite pressure from the government not to withdraw its stimulus steps too soon.
Fujii also said the central bank must "cooperate with the government while making its decision independently."
Prime Minister Yukio Hatoyama is due to meet Shirakawa this week, reports say.
Japan is emerging from its worst post-war recession, in part due to stimulus measures and as exports have picked up, but falling consumer prices have threatened to throw the country into a deflationary cycle.
The yen's rise to a 14-year high against the dollar has piled pressure on Japanese companies because it makes their exports less competitive, heightening fears of a double-dip recession in Asia's biggest economy.