TOKYO (XFN-ASIA) - Hidenao Nakagawa, secretary general of the governing Liberal Democratic Party, urged the central bank not to raise interest rates at its policy-board meeting later this week, the Kyodo News Service reported.
Kyodo quoted Nakagawa as saying in Aichi Prefecture that 'if the Bank of Japan has a different perception on the economy, (the government) should take measures without covering it up.'
'The government has a duty of exercising the right to seek a postponement on taking a vote (on a rate change at a two-day BOJ policy board meeting),' he said.
Nakagawa also said that if the BOJ 'cannot unify its judgment on the economy and policy targets to conform to those of the government, it will represent a major flaw in the legal system.'
Representatives of the government are allowed to participate in a monetary policy meeting of the BOJ as observers, but they are not given the right to vote.
The government member, however, is entitled to request a postponement on taking a vote on a matter on the agenda until the next round.
The rule was introduced under the revised BOJ law that took effect in April 1998. The government exercised the right for the first time in August 2000 when the BOJ was discussing ending its ultra-easy monetary policy.
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