Japan PM Noda contradicts challenger Abe on BOJ

TOKYO Fri Nov 16, 2012 4:59am EST

TOKYO Nov 16 (Reuters) - Prime Minister Yoshihiko Noda said on Friday it would cause problems over the Bank of Japan's independence if the government set the central bank's goals and details of its policy steps.

He said it was seen as common sense globally to maintain the independence of central banks, including that of Japan.

But he added: "There's no doubt the government needs to cooperate closely with the Bank of Japan to beat deflation and boost the economy."

His comments contrast with those of opposition leader Shinzo Abe, who this week called on the central bank to push interest rates to zero or below zero to spur lending, prompting the yen to slide to a six-month low.

Noda was speaking at a news conference after parliament's lower house was dissolved for a Dec. 16 election that is likely to return the long-dominant Liberal Democratic Party (LDP) to power with Abe, a conservative former prime minister, at the helm.

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