Bank of Japan holds first policy meeting

TOKYO (AP) ― Japan’s central bank is holding its first policy meeting under a new governor amid expectations of fresh moves to ease monetary policy and spur a recovery in the world’s third-largest economy.

Haruhiko Kuroda took the helm at the Bank of Japan on March 19, vowing to do whatever it takes to break Japan’s economy out of deflation and attain a 2 percent inflation target.

It is unclear whether the central bank meeting Wednesday and Thursday will yield fresh policy moves or if they might come in a second policy meeting later this month, once parliament gives final confirmation of Kuroda’s appointment.

But Kuroda faces strong pressure to make headway in ending the trend toward flat or lower prices that Prime Minister Shinzo Abe’s administration says is discouraging companies from investing and hiring workers.

“I hope they will have a drastic regime change and invite aggressive monetary easing,” Kozo Yamamoto, a lawmaker in Abe’s circle of economic advisers. Attaining a 2 percent inflation rate within the next several years may be difficult, he acknowledged.

“That’s why we need very, very drastic action,” Yamamoto told a gathering of executives Wednesday at the American Chamber of Commerce.

Among various options, the BOJ could increase its asset purchases sooner than earlier promised. It could extend maturities on the government bonds it buys to five or 10 years, rather than the current limit of three years. It also could consider buying higher-risk assets, instead of just government bonds.

In the final quarter of 2012, the economy was on the cusp of recovery, recent data show. A quarterly central bank survey released Monday, known as the “tankan,” showed business sentiment improving for the first time in nine months, though the gains were weaker than expected.