TOKYO, March 4 Prominent Japanese economist and
former government minister Heizo Takenaka said on Tuesday he
thinks the Bank of Japan is considering additional monetary
easing to cushion the blow of a sales tax increase in April.
"The BOJ is now ready for another run of action, in my
impression," Takenaka said, adding that he had recently met
privately with central bank chief Haruhiko Kuroda.
After a half-year burst of growth from Prime Minister Shinzo
Abe's mixture of monetary and fiscal stimulus, speculation is
growing that the world's third-biggest economy may soon slow
sharply, forcing the BOJ to add to the massive asset purchases
it undertook last April.
In February, the BOJ maintained its ultra-easy monetary
policy and extended special loan programs to help boost economic
growth. The policy board meets again next week.
Kuroda has repeatedly said the economy remains on track to
hit his 2 percent inflation target but that the BOJ would not
hesitate to act if the target appears in danger.
"He has a very flexible attitude toward monetary policy,"
said Takenaka, who was considered a reformist when he was
Junichiro Koizumi's economy minister from 2001-2005. Takenaka is
a member of Abe's panel on industrial competitiveness.
There are concerns the sales tax hike could hurt the
economic recovery as effects from Abe's strategy of bold
monetary policy and huge stimulus spending seem to be fading.
Most analysts polled by Reuters last month expect the BOJ
to ease policy further by this summer to help boost the economy
and pull it out of 15 years of deflation.