Kan, BOJ chief Shirakawa likely to discuss yen's surge next week+

TOKYO, Aug. 17 Kyodo -
Prime Minister Naoto Kan will likely hold talks with Bank of Japan Governor
Masaaki Shirakawa next week on recent economic developments, including the
yen's sharp appreciation, sources close to the matter said Tuesday.
The government is considering introducing fresh fiscal stimulus amid signs of
an economic slowdown in the country, according to government sources. During
the meeting, the second of its kind following one in June, Kan is expected to
ask Shirakawa to support the government's efforts to boost the economy by
further easing the central bank's monetary policy.
While Kan did not clearly state when the meeting would be held, he told
reporters that the government ''wants to maintain communication'' with the BOJ.
There is growing speculation that Japanese monetary authorities might intervene
in the currency market to stem the yen's surge against the U.S. dollar and
other major currencies, which has damaged the earnings of Japanese exporters.
Last week, the Japanese currency briefly rose to its highest level in 15 years
against the dollar, heightening expectations that Tokyo will intervene in the
market for the first time in over six years.
The government and the BOJ have agreed to hold direct talks regularly, and Kan
and Shirakawa met for the first time on June 21 after the prime minister
assuemd office the same month.
In the upcoming meeting, the two are also expected to exchange views on Japan's
economic slowdown.
The Cabinet Office on Monday released gross domestic product data for
April-June that showed the Japanese economy grew an annualized real 0.4
percent, far below market forecasts.
With the sluggish GDP data, the government started considering fresh fiscal
stimulus measures, with some officials saying emergency steps could involve
efforts to boost consumer and business spending.
The BOJ has already come under pressure from both ruling and opposition
lawmakers to ease monetary conditions further through measures such as
''quantitative easing'' -- injecting liquidity into the economy by increasing
its purchases of government bonds and other assets.
==Kyodo
2010-08-17 23:55:58