BOJ May Adjust Policy on Global Changes, Japan’s Nishimura Says

Japan’s central bank may adjust its policies as overseas conditions change, Deputy Economy Minister Yasutoshi Nishimura said during a trip to Hong Kong to explain the nation’s economic measures.

“The Bank of Japan has various options for its decisions as events unfold in the markets or overseas,” Nishimura, 50, said yesterday in an interview. “It will basically continue conducting its current policy, while being able to make various adjustments such as increasing the frequency of its bond purchases.”

The central bank is forecast to keep its easing program on hold in a decision due today after signs that a recovery in the world’s third-biggest economy is gathering steam. Nishimura’s comments echo those of BOJ Governor Haruhiko Kuroda who has said the bank will make policy adjustments as needed since unleashing unprecedented easing in April.

“I respect what the BOJ has decided independently, and have confidence in its policy making,” Nishimura said.

Nishimura was in Hong Kong with former economy minister Heizo Takenaka. His trip follows a visit to New York on June 28, where he was joined by Koichi Hamada, an adviser to Prime Minister Shinzo Abe who was an architect of Abenomic’s so-called first arrow of “bold” monetary easing.

Policy makers at the previous BOJ meeting in June refrained from expanding their tools to address bond-market volatility. They left unaltered a one-year fixed rate loan facility after a surge in 10-year government bond yields from a record low in April.

Under Fire

Japan has come under fire as the yen has weakened 13 percent this year against the dollar, boosting exporters such as Toyota Motor Corp. The nation should explain how it will guard against external effects from its deflation-fighting efforts, the European Union said July 8 in a planning document for a July 19-20 meeting of Group of 20 finance ministers in Moscow.

Nishimura rejected criticism of Japan’s policies, mirroring his comments in a January interview.

“Each country decides on their own economic policies based on their own economic conditions. Some have conducted bold monetary easing, some haven’t,” he said. “There have been adverse exchange-rate movements for some countries, but looking at the trend, a recovery in the Japanese economy will mean we import more from overseas, which in turn will drive the global economy.”

A native of Akashi in western Japan’s Hyogo Prefecture, Nishimura graduated from the Faculty of Law at Tokyo University. He joined the trade ministry in 1985 and was elected to the lower house of parliament for the first time in 2003.

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