TOKYO, March 19 Japan's government and central
bank will likely unleash more stimulus over the coming year to
bolster the economy and stoke moderate inflation, said Toshiro
Muto, a former top civil servant and Bank of Japan official.
The Bank of Japan will likely add to its massive stimulus,
probably through increased purchases of Japanese government
bonds, by September, the former deputy central bank governor and
vice finance minister told Reuters on Tuesday.
Investor expectations are running high for the central bank
to add to its unprecedented asset-buying to help cushion the
economy from an April 1 sales tax increase and hit its 2 percent
inflation target, he said.
"I forecast that there is considerable probability of an
expansion of the quantitative easing policy as early as
April-June and at the latest in July-September," said Muto,
chairman of the Daiwa Institute of Research think tank.
In a Reuters poll on Wednesday, seven of 16 economists
forecast the BOJ will ease in July, three predicted April 30,
two said Oct. 31 and two said the BOJ won't ease this year.
Muto said the chance of further government spending in the
fiscal year from April is "very high" to replenish this year's
fiscal stimulus as the government decides whether to raise the
sales tax again in 2015.
(Reporting by Yoshifumi Takemoto; Writing by William Mallard;
Editing by Dominic Lau)