TIMELINE:Who's the boss? Tension between Japan govt and BOJ
Nov 24 - Japanese cabinet ministers increased pressure on the Bank of Japan on Tuesday to respond to deflation, with one saying that the central bank was "asleep at the wheel". [ID:nT322574]
The remark was the latest in a row between the government and the Bank of Japan over how to best handle the economy.
-- FACTBOX on government and BOJ relations [ID:nT309138]
-- TIMELINE on BOJ policy moves since 1973 [ID:nT263574]
-- TAKE A LOOK on Japan economy and policies [ID:nECONJP]
The following milestones trace how tensions have developed since the Democratic Party took power in a historic election win.
Aug 30, 2009: The Democratic Party of Japan wins national election, ending five decades of almost constant rule by the Liberal Democratic Party . [ID:nT356076]
Sept 1: BOJ Governor Masaaki Shirakawa says he has met with Japan's next leader, Yukio Hatoyama, and exchanged views on the economy. He also meets senior DPJ lawmakers. [ID:nTKU105522]
Sept 2: The government will not meddle in BOJ policy and market operations, key DPJ lawmaker says, shrugging off speculation it may pressure BOJ to print money to buy government debt. [ID:nT20701]
Sept 16: DPJ takes control of government. BOJ is independent, but members of the government send conflicting signals, raising questions over whether they will try to interfere in monetary policy. [ID:nT354752] [ID:nT354752]
Oct 6: Government puts pressure on BOJ to avoid ending corporate emergency funding too soon. Finance minister says the economy has not re-balanced. [IDnSP451222]
Oct 9: National Strategy Minister Naoto Kan says fund-raising conditions remain tough for small companies but notes BOJ policy is independent of the government. [ID:nT354062]
Oct 14: BOJ defers decision on withdrawing support for corporate finance after government presses it to consider the economic cost of such a move. [ID:nT302216]
Oct 16: Government says examining setting up a forum for regular talks with the Bank of Japan to replace an economic panel that was abolished when it took power. [ID:nT144566]
Oct 27: Finance Minister Hirohisa Fujii criticises BOJ's economic view as too rosy and narrowly informed. He says BOJ is looking at the economy "in its own way". [ID:nT285056] [ID:nTKF106697]
Oct 28: A government representative on BOJ policy board says government understands the central bank's corporate funding measures are "very abnormal", suggesting it may not oppose the BOJ withdrawing them eventually. [ID:nT323466] [ID:nTKX00649]
Oct 29: Government and central bank are looking at monthly talks on the economy starting in early November, a source with knowledge of the matter says. [ID:nT351970]
Oct 30: Despite government pressure, BOJ agrees to begin withdrawing from credit markets at the end of the year on view conditions have improved enough for it to phase out this and other emergency steps put in place to deal with the global financial crisis. But it will keep a key loan programme running until March, earning grudging backing from a government worried about a return to recession. [ID:nT32693]
For a graphic tracking Japan's credit market improvements, click http://r.reuters.com/zac76f
-- Government later says it will keep its commercial paper buying programme in place until March or later, The Nikkei economic daily reports. [ID:nT143851]
Nov 6: Government dismisses BOJ view there is little chance of a second recession, saying stimulus will be needed next year to prevent such a slide. Banking minister Kamei says he does not share BOJ's economic assessment. [ID:nT213576] [ID:nTKF106725]
Nov 13: Banking minister Shizuka Kamei, a frequent BOJ critic, says central bank seems a little weak at analysing economic conditions behind statistics. [ID:nT147427]
Nov 16 - National Strategy Minister Naoto Kan says government hopes to communicate closely with BOJ so that they can work together to avoid deflation from deepening. [ID:nTKF106737]
Nov 19: Finance Minister Hirohisa Fujii says the government should respect BOJ independence and the monetary and finance authorities should work in harmony. [ID:nTKU105682]
-- Government nominates monetary policy expert Ryuzo Miyao, an academic at Kobe University, to join BOJ policy board in late March. [ID:nT259620] [ID:nTKU105680]
Nov 20: The BOJ says the economy is starting to pick up, an upgrade of its official assessment that flies in the face of government pressure for the BOJ to play its part to stop deflation from deepening.
-- Naoto Kan, minister in charge of the economy, says the government thinks Japan is in deflation and that it would tell the central bank that, while Finance Minister Hirohisa Fujii says price trends are key to guiding policy and the BOJ must act appropriately. [ID:nT257593] [ID:nTKX006551]
Nov 24: Japanese banking minister Shizuka Kamei, a critic of the BOJ, says the central bank is "asleep at the wheel" and is not paying attention to economic conditions. [ID:nTFD006451]
Source: Reuters
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