By Stephen Cannon, BridgeNews
Tokyo--Feb. 9--Finance Minister Kiichi Miyazawa said Friday there is no gap in the assessments of the economy by the Finance Ministry, the Bank of Japan and the Cabinet. Members of the dominant Liberal Democratic Party have engaged in verbal arm-twisting to pressure the BOJ into further monetary easing at the central bank's Friday policy board meeting, but so far the BOJ isn't biting.
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The government announced Thursday a downward revision of gross domestic product for the July-September quarter from 0.2% growth to a 0.6% contraction.
The BOJ raised interest rates by 25 basis points during that period against the expressed wishes of the government.
However, Miyazawa said the government is "always telling the Bank of Japan its opinion" on movements in prices and would again Friday at the BOJ meeting.
Senior LDP officials such as stock price-boosting panel head Hideyuki Aizawa have been pushing Japan's central bank to adopt a quantitative monetary target in order to boost liquidity and in turn stimulate demand for equity.
Nevertheless, BOJ Governor Masaru Hayami said clearly Thursday that the BOJ will maintain its policy, demonstrating his will to stand his ground against the LDP.
Miyazawa said he has nothing to say on Thursday's fall in the Nikkei 225 below the psychologically significant 13,000 level for the first time since October 1998.
Miyazawa almost always refrains from comment on stock market levels, indicating his recognition that stock prices are determined by market forces and are not an appropriate target for government economic policy.
Miyazawa said that although the three coalition parties--the LDP, the New Komeito and the New Conservative Party--are releasing a midterm report Friday on measures to stimulate increases in Japan's plummeting stock levels, "now isn't the time to do anything."
Miyazawa explained that the government's role in the stock market is only to create regulations that facilitate participation in equity investment, thereby showing his opposition to direct government intervention in stock market levels.
The Nikkei opened at 13,140.61 Friday. End