MNI POLICY: BOJ Amamiya: Won't Rule Out All Possible Tools

     TOKYO (MNI) - Bank of Japan Deputy Governor Masayoshi Amamiya said Friday

that the BOJ will not rule out using all possible policy tools regarding

additional easy policy.

     "We will not rule out all possible tools. But as for the four tools, we can

use each policy alone or a combination of individual policy tools, applying

versions," Amamiya said.

     He added that the BOJ is focused on the benefits and costs of monetary

policy in a balanced manner when deciding policy.

     Amamiya, speaking to business leaders in Tokyo Friday, said the BOJ will

consider additional easy policy without hesitation if the momentum toward

achieving the 2% price target is lost.

     "The standard scenario remains that the economy is expected to pick up in

the second half of this year. But downside risks to the main scenario are big,"

Amamiya said.

     --OUTPUT GAP

     "We are focused on the output gap and corporate price- and wage-setting

activities, and people's medium- to long-term inflation expectations in order to

measure how the momentum toward hitting the 2% price target is maintained,"

Amamiya said.

     He added that the BOJ is focused on how solid domestic demand continues

amid weak overseas demand and how the slowdown in overseas economies deepens.

     The BOJ June Tankan business sentiment survey clearly showed the current

economic climate, Amamiya said, with major manufacturers influenced by worsening

overseas demand, while business sentiment for non manufacturers that depend on

domestic demand improved. 

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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