Germany Cautions Japan on BOJ Monetary-Policy EasingRainer Buergin
The Bank of Japan’s move toward record monetary easing can’t be a substitute for government policies to overhaul the economy, German Finance Ministry spokesman Martin Kotthaus told reporters in Berlin today.
Japan in a Group of 20 accord has agreed to “avoid anything in which one uses monetary policy to gain any economic or export advantages,” Kotthaus said at a regular government press conference when asked to comment on BOJ policy.
“Monetary policy can indeed be used to achieve certain things, but can never be a substitute for structural reforms,” Kotthaus said. “And the Japanese have already said that they will decisively tackle the necessary reforms in their country,” which is to be welcomed, Kotthaus said.
The BOJ said it will double the monetary base by the end of 2014 through purchases of government bonds in Japan’s biggest round of asset purchases. The yen dropped to 97.19 per dollar, the lowest since 2009, before trading at 96.22 as of 1:20 p.m. in Berlin.
“I do believe that the international orientation, the joint international decisions on that matter, are quite clear,” Kotthaus said. “Reforms must be made, monetary policy can’t be a substitute.”