* LDP not asking BOJ to buy bonds recklessly - Hosoda
* Adds there are limits to how much govt can spend
* Key is to encourage companies to boost investment
By Kaori Kaneko
TOKYO, Dec 20 The Bank of Japan has already
shown its readiness to keep an ultra loose monetary policy but
stressing its resolve to ease "unlimitedly" would make a
difference, a senior Liberal Democratic Party (LDP) official
said on Thursday.
"What's important is to encourage private investment through
easy monetary policy," said Hiroyuki Hosoda, chairman of the
LDP's general council told Reuters.
However, Hosoda added that the LDP is not implying that the
central bank should buy government bonds recklessly or
intentionally create unwelcome inflation by setting a price
The BOJ meets for the second day of its policy-setting
meeting on Thursday, when it is expected to ease monetary policy
further via an increase in asset purchases.
There are limits to how much the government can spend to
revive the economy, Hosoda said, adding that any increase in
public works spending - together with BOJ monetary easing -
would be aimed more at improving business sentiment and
encouraging companies to increase investment.
Shinzo Abe, head of the opposition LDP which won in a
landslide in Sunday's election, has put the central bank's
independence on the line by repeatedly calling for a binding 2
percent inflation target, double the BOJ's current price goal,
and for buying more bonds aggressively.
Hosoda said Abe, the incoming prime minister, is expected to
focus on security and defense when he meets U.S. President
Barack Obama in January, rather than on whether Japan would join
the Trans-Pacific Partnership free trade deal.