Abe Aide Says `Wouldn't Be Strange' for BOJ to Boost Stimulus

  • Shibayama says Fed holding means no concern of overly weak yen
  • BOJ decision Friday seen as almost a coin flip by economists

Masahiko Shibayama, an aide to Prime Minister Shinzo Abe, said it "wouldn’t be strange" if the Bank of Japan boosted its already unprecedented stimulus at a meeting on Friday.

Shibayama said in an interview on Tuesday that the U.S. Federal Reserve’s decision to forgo a rate rise in September meant "there was no need to worry about an excessive slide in the yen" if Japan’s central bank eased this week.

The comments by the former head of the ruling Liberal Democratic Party’s finance committee contrast with remarks by Finance Minister Taro Aso, who said earlier this month the bank is unlikely to expand stimulus for now. Economists are split on the outcome of Friday’s meeting.

Data on Wednesday showed retail sales rose less than expected last month, providing more evidence that the world’s third-largest economy may have entered a recession last quarter. The debate on easing may intensify further if figures out Thursday show an expected third straight monthly slide in industrial production.

While analysts see the BOJ’s goal of achieving 2 percent inflation by September 2016 as impossible, Shibayama said it wouldn’t be a problem if the BOJ doesn’t reach its target by that date.

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