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.
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