BOJ Nishimura: to debate if easing enough for undershooting economy

NIIGATA, Japan Wed Dec 5, 2012 12:33am EST

NIIGATA, Japan Dec 5 (Reuters) - Bank of Japan Deputy Governor Kiyohiko Nishimura said on Wednesday the central bank will debate whether its monetary easing in September and October was enough to support the economy, which may be undershooting its projections.

"When you look at which way the economy's momentum is headed compared with the BOJ's forecasts made in October, it is heading downwards despite some positive signs such as a rise in industrial output," Nishimura told a news conference in Niigata, northwest Japan.

Earlier, Nishimura told business leaders in Niigata that the BOJ would take decisive action to support the economy if risks to the outlook heightened, offering the strongest signal to date from a policymaker of the bank's readiness to ease policy again this month. It will hold a two-day policy review ending on Dec. 20.

A former academic, Nishimura surprised markets by proposing that the central bank boost asset purchases in April last year. His proposal was not accepted by the board at that time. He has voted with the majority since then.

The BOJ set a 1 percent inflation target in February and has eased monetary policy four times so far this year to beat deflation and ease the pain on the export-reliant economy from a strong yen and weakening global demand.

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