Tuesday, March 19, 2013
DJ: BOJ Gov Shirakawa Looks Back 'A Turbulent 5 Years'
TOKYO--Bank of Japan Gov. Masaaki Shirakawa said at a press conference marking the end to his five-year term that he feels there is a danger of implementing monetary policy aimed at influencing market expectations because what markets expect sometimes conflicts with longer-term economic stability.
"It was a turbulent five years and unprecedented events took place once after another," he said Tuesday.
Mr. Shirakawa, a career official at the BOJ, unexpectedly became the governor in April 2008 after the ruling party's initial nominees were rejected by the opposition.
For the first half of his tenure, his job could be characterized acting to prevent the financial crisis in the U.S and in euro-zone countries from spilling over into the domestic financial system. But the latter half of his term was marked with intense scrutiny from lawmakers as the yen's relentless surge to record high of Y75.31 against the dollar in 2011 and the central bank's failure to get the economy out of years of deflation prompted the government to turn up the heat on the central bank.
At Tuesday's press conference, Mr. Shirakawa also reiterated that efforts by a wide range of entities to enhance growth and competitiveness are needed to get Japan out of deflation.
"I have a great interest in if those efforts will progress," he added.
Implicitly suggesting he doubts the effectiveness of the push being made by the current government, Mr. Shirakawa said that linkage between the monetary base and price increases have been cut off, indicating the central bank's 2% inflation target can't be achieved by solely through monetary easing.