--BOJ's Hayami says recent weak stks, output within expectations
--BOJ's Hayami says structural reforms inevitable for econ recovery
--Hayami: Wants to set BOJ policy after closely examining price data
--Hayami: BOJ policy will not be easily affected by public opinion
By Keiko Ujikane Tokyo, June 14 (BridgeNews) - Bank of Japan Governor Masaru Hayami said Thursday he doesn't think there is a need to take additional monetary measures now, suggesting he is unwilling to shift policy at the BOJ's two-day monetary policy meeting on Thursday and Friday. Speaking before the Upper House financial committee, Hayami also said the recent weak performance of Japanese stocks and slowdown in production is in line with expectations the BOJ voiced in April when the central bank released its risk assessment on prices and economic outlook.
In the wake of the weaker-than-expected 0.2% fall on quarter in the January-March gross domestic product and the recent decline in the Nikkei stocks below the psychologically important 13,000-line, some policy makers started calling for further monetary easing this week, fueling to speculations that the BOJ may be forced to take an additional step at its two-day meeting.
"We are not thinking of implementing a further monetary measure for now," Hayami said in parliament, scaling down the speculation over further easing. He also said the BOJ already mentioned at its March 19 meeting that the BOJ would maintain the current quantitative policy of adjusting the BOJ's current account balance at around 5 trillion yen until the consumer price index stabilizes at or above zero percent on year.
The central bank also said on March 19 that the BOJ considers increasing the outright purchases of the long-term Japanese government bonds, known as rinban operation, if it is necessary to provide liquidity more smoothly. In this case, the increase should be subject to the limitation that the outstanding amount of long-term JGBs held by the BOJ should be kept below the outstanding balance of banknotes issues. "We would like to decide monetary policy after considering a variety of factors," Hayami said. "Yet, we should not be easily affected by public opinion (when we set policy.)"
Hayami also said that prices fall due to two reasons--the supply-side factors and the demand-side factors, and the central bank would like to closely examine these factors in price data when it sets monetary policy.
Turning to Japan's economy, the central bank governor said it is inevitable to implement structural reforms, including bad-loan write-offs, in order to ensure the sustainable economic recovery, adding that he expects to see further progress in the government's efforts for structural reforms. He also said he is closely watching the U.S. economy