FACTBOX-Recent quotes by policymakers on BOJ, economy

Thu Oct 29, 2009 7:05pm EDT

TOKYO, Oct 30 (Reuters) - The Bank of Japan is leaning towards scrapping some corporate finance support programmes that expire in December, but it may put off a decision again on Friday in the face of government pressure.

The central bank is also expected to forecast three years of deflation in its twice-yearly economic outlook report, a sign it will keep interest rates near zero at least until 2011. [ID:nT271532]

Following are recent key comments by BOJ and Japanese government officials on monetary policy and the economy:

FINANCE MINISTER HIROHISA FUJII, Oct 27, at meeting of ministry's regional branch heads:

"The BOJ has repeatedly said the economy is getting better, but they are dealing with different people.

"I believe everyone here is examining the situation in a more down to earth way."

BOJ DEPUTY GOVERNOR KIYOHIKO NISHIMURA, Oct 21, in speech to business leaders in Kobe, western Japan:

"Uncertainty remains high. For instance, if job conditions in the developed world continue to deteriorate due to balance sheet adjustments, that would push down demand there. The world economy would be weaker (than the BOJ's midpoint scenario).

"If emerging economies turn out to be stronger, the world economy might overshoot too, but that could boost resource demand and push up commodity prices. That could worsen the terms of trade for the developed world and lead to a stagflation-like situation."

BOJ GOVERNOR MASAAKI SHIRAKAWA, Oct 14, at news conference after policy board meeting:

"The supportive role of our measures for commercial paper and corporate bond markets is declining. We have had auctions where there were no offers to sell commercial paper, while the offers to sell corporate bonds have been declining.

"What to do about various emergency measures in place now is a technical issue. There's no change in our stance of keeping interest rates very low and providing ample liquidity to markets...

"We judged today that it was appropriate to make a comprehensive examination of all these measures and reach a conclusion at the next meeting or later."

"Regardless of how we handle these measures, we will continue to keep super-low interest rates and provide ample funds to maintain easy monetary conditions so that we can support the economic recovery."

FUJII, Oct 9, at news conference:

"It is a fact that the BOJ's purchases of CP and corporate bonds have attracted fewer bids.

"But that does not mean that I will tell (the BOJ) what to do, so I will leave it up to the BOJ."

NATIONAL STRATEGY MINISTER NAOTO KAN, Oct 9, at news conference:

"I'm aware that funding at big companies has stabilised considerably ... I also heard that the BOJ's purchases of CP and corporate bonds have become less important ...

"Our view is that financial conditions at small firms remain very severe. I believe that the BOJ will consider its own policy independently, but the BOJ law also stipulates that the government and the BOJ keep in contact with each other where necessary."

FUJII, Oct 6, at news conference:

"I firmly believe that (BOJ Governor Masaaki) Shirakawa will not do things that run counter to economic conditions ...

"The BOJ law stipulates that its independence should be respected, but at the same time it says that the BOJ should act in harmony with the state's economic policy ... I believe the BOJ will adopt a policy that is in harmony with the government's ...

"I think the BOJ is at the stage where it examines corporate funding conditions appropriately."

BOARD MEMBER ATSUSHI MIZUNO, Oct 6, in interview with Reuters:

"There seems to be a growing view in the money markets that it would not cause much confusion even if the CP buying operations were ended ...

"Some point out that CP buying operations have caused such side-effects as to reduce activity in markets. Outstanding issuance has decreased in CP markets ...

"On the other hand, there is strong demand for special operations aimed at backing corporate finance, with the balance remaining almost the same as its peak at around 7 trillion yen ($78 billion)."

FUJII, Sept 18, in group interview:

"The Democratic Party of Japan generally gives a strong consideration towards the BOJ's independence ...

"The BOJ law stipulates that the BOJ should fully consider monetary policy but it does not say that the government should give orders."

BOJ DEPUTY GOVERNOR HIROHIDE YAMAGUCHI, Sept 18, in speech:

"We should decide what to do with these special measures in line with the degree of improvements in corporate finance and market conditions ...

"We need to pay heed to the risk that keeping these steps in place for long could hamper an autonomous recovery in market functions and distort asset distribution." (Reporting by Rie Ishiguro)