Japan's Maehara to attend BOJ meeting, step up stimulus pressure

TOKYO Sun Nov 18, 2012 8:30pm EST

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TOKYO Nov 19 (Reuters) - Japanese Economics Minister Seiji Maehara is to attend the Bank of Japan's monetary policy meeting this week, Jiji news agency reported, a sign the government is putting more pressure on the central bank to energise the sluggish economy.

Maehara has attended the meeting twice in the past. Under the laws governing the BOJ, representatives of the government can attend BOJ meetings but cannot vote on monetary policy.

Maehara has repeatedly said he would expect the BOJ to pursue strong monetary easing to achieve its goal of a 1 percent rise in the consumer inflation, and he advocates allowing the BOJ to buy foreign bonds.

Sources told Reuters the central bank is set to hold fire on interest rates this week and may also defy market expectations of policy action in December, pushing back any further monetary stimulus until early next year to test the policies of a new government due after elections set for Dec 16.

Markets expect the central bank to come under further political pressure for action given that polls suggest leader of the main opposition Liberal Democratic Party Shinzo Abe will become the next prime minister after next month's elections. Abe wants the BOJ to supply unlimited amounts of cash to spur the economy and achieve 3 percent inflation.

The BOJ boosted its asset-buying programme four times this year and late last month twinned the latest stimulus with an unprecedented joint statement with the government pledging continued efforts to end deflation.

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