By Masayuki Kitano
TOKYO, Sept 22 (Reuters) - Bank of Japan Governor Masaaki Shirakawa said the central bank will continue to provide ample liquidity to markets, including funds supplied through currency intervention, a Japanese newspaper said on Wednesday.
He also reiterated that the central bank needs to watch out for downside risks to Japan's economy, such as how uncertainty over the global economy affects exports and corporate sentiment.
'Uncertainty is increasing more than before,' Shirakawa was quoted as saying in an interview in the Yomiuri newspaper conducted on Tuesday.
He also said the Japanese government's massive yen-selling intervention last week was the appropriate decision, given the economic situation.
Tokyo intervened in the currency market on Sept. 15 by selling yen for the first time in more than six years as the yen's surge to a 15-year high versus the dollar threatened to derail Japan's slowing economy and worsen deflation.
The BOJ has so far let the money supply increase via the government's currency intervention. The government is likely to pressure the central bank to continue its 'unsterilisation' and ease policy in other ways to maximise the benefits of intervention.
Ordinarily when a central bank or a government intervenes by selling its currency, the bank also tries to absorb, or 'sterilise' the extra cash by offering securities for sale. In Japan's case, this has not happened yet.
The BOJ's next scheduled policy meeting is on Oct. 4-5. Easing policy at this meeting cannot be ruled out, and options include increasing government bond purchases and expanding a cheap fund-supply tool, sources say. For more, see: )
(For more stories on the Japanese economy, click
(Additional reporting by Yoko Nishikawa, Leika Kihara; Editing by Dan Grebler)
((masayuki.kitano@thomsonreuters.com; Reuters Messaging: masayuki.kitano.reuters.com@reuters.net; +81-3-6441-1872)) Keywords: JAPAN ECONOMY/SHIRAKAWA (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
TOKYO, Sept 22 (Reuters) - Bank of Japan Governor Masaaki Shirakawa said the central bank will continue to provide ample liquidity to markets, including funds supplied through currency intervention, a Japanese newspaper said on Wednesday.
He also reiterated that the central bank needs to watch out for downside risks to Japan's economy, such as how uncertainty over the global economy affects exports and corporate sentiment.
'Uncertainty is increasing more than before,' Shirakawa was quoted as saying in an interview in the Yomiuri newspaper conducted on Tuesday.
He also said the Japanese government's massive yen-selling intervention last week was the appropriate decision, given the economic situation.
Tokyo intervened in the currency market on Sept. 15 by selling yen for the first time in more than six years as the yen's surge to a 15-year high versus the dollar threatened to derail Japan's slowing economy and worsen deflation.
The BOJ has so far let the money supply increase via the government's currency intervention. The government is likely to pressure the central bank to continue its 'unsterilisation' and ease policy in other ways to maximise the benefits of intervention.
Ordinarily when a central bank or a government intervenes by selling its currency, the bank also tries to absorb, or 'sterilise' the extra cash by offering securities for sale. In Japan's case, this has not happened yet.
The BOJ's next scheduled policy meeting is on Oct. 4-5. Easing policy at this meeting cannot be ruled out, and options include increasing government bond purchases and expanding a cheap fund-supply tool, sources say. For more, see: )
(For more stories on the Japanese economy, click
(Additional reporting by Yoko Nishikawa, Leika Kihara; Editing by Dan Grebler)
((masayuki.kitano@thomsonreuters.com; Reuters Messaging: masayuki.kitano.reuters.com@reuters.net; +81-3-6441-1872)) Keywords: JAPAN ECONOMY/SHIRAKAWA (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.