(Corrects 12th paragraph to show that Nakahara was speaking to
Reuters not to Abe)
* Govt has pressured BOJ before, but this time seems
* PM and BOJ chief meet regularly to exchange views
* Lack of pressure on BOJ briefly boosts yen
* Ex-BOJ Nakahara urges further easing next year
* BOJ's next policy review on April 30
By Stanley White
TOKYO, April 15 Prime Minister Shinzo Abe met
with Bank of Japan Governor Haruhiko Kuroda on Tuesday but did
not pressure the central bank chief to ease policy, curbing
speculation that the BOJ might take more aggressive action this
Over lunch, Abe and Kuroda "took plenty of time to discuss
economic conditions and so forth in a calm manner," said Chief
Cabinet Secretary Yoshihide Suga.
The premier did not ask Kuroda to take further measures to
bolster the world's third-biggest economy and pull it out of
deflation, Kuroda and Suga told reporters separately.
Kuroda and other BOJ officials have repeatedly expressed
confidence that this month's increase in the national sales tax
will not derail the economy or prevent inflation from hitting
the central bank's 2 percent target.
However, many economists and traders say the BOJ will have
to ease policy again - perhaps in July - as consumer price gains
are likely to stall. The BOJ has had trouble bridging this gap
in perception about future policy moves.
Kuroda said he told Abe "that if there were any developments
that threatened to damage progress towards achieving our
inflation target that I would adjust policy without hesitation."
The central banker also reiterated that while the economy is
moving steadily towards the inflation target, "we're only half
News that Abe did not pressure Kuroda to ease further
briefly pushed up the yen, which has fallen sharply in the year
since Kuroda unleashed the BOJ's unprecedented easing, buying
massive amounts of bonds and other assets to flood the financial
system with Japanese currency.
NEXT POLICY REVIEW
The BOJ's next policy meeting is on April 30, when it will
update its economic forecasts.
Some aides close to Abe want the BOJ to do more, fretting
that the rise in the sales tax on April 1 to 8 percent from 5
percent may hit the economy more than expected and delay an exit
But the ardour of even these reflationists may be ebbing.
Former BOJ policy board member Nobuyuki Nakahara, an informal
Abe adviser, is now telling Abe that the central bank can wait
until next year to ease.
Nakahara told Reuters on Tuesday that it takes time for
monetary policy to take effect, so it is too soon to expect
further easing just a year after Kuroda's easing.
Just as the Federal Reserve has eased U.S. policy three
times since 2008, the BOJ should be ready to continue with
monetary easing for five or six years, he said.
Government officials have applied pressure on the BOJ in the
past, raising doubts about the central bank's independence.
But that has not prevailed as the mainstream view in the
government this time and the BOJ is barely facing any political
pressure, with key members of Abe's cabinet like Economics
Minister Akira Amari praising the BOJ for doing "extremely
The BOJ has stood pat since deploying an intense burst of
stimulus last April, when it pledged to double base money via
aggressive purchases of government debt and risk assets to
accelerate inflation to 2 percent in roughly two years and
decisively end 15 years of deflation.
Abe and Kuroda meet regularly in groups such as a major
government advisory panel, but Tuesday's meeting was the first
one-on-one between the two since December. Kuroda said it was
"nothing special" and simply part of the regular face-to-face
exchanges that occur between Japan's prime minister and its
central bank governor.
(Additional reporting by Yoshifumi Takemoto and Kaori Kaneko;
Editing by Chris Gallagher and William Mallard)