TOKYO, March 5 Monetary easing must accompany
fiscal spending to help Japan escape deflation because increased
spending could cause bond yields and the yen to rise, Kikuo
Iwata, the government's nominee to become central bank deputy
governor, said on Tuesday.
A widespread belief that the BOJ's monetary policy regime
has changed would cause money to flow from savings accounts into
equities and other investments, which would stimulate
consumption and corporate investment, Iwata said at a
confirmation hearing in the lower house of parliament.
Prime Minister Shinzo Abe last week nominated Iwata, a
professor at Tokyo's Gakushuin University, to be the new deputy
governor of Japan's central bank in a push for more aggressive
monetary easing to meet a 2 percent inflation target and end
nearly two decades of deflation.