BOJ Meeting: Central Bank to Observe Risk of Financial Conditions

Some Bank of Japan board members said that the Central bank should observe the risk of fiscal conditions in Japan becoming stressed if the European market became more unsteady and led to further Yen increases and dips in share prices, minutes of its May 20-21 meeting revealed.

At the summit, the central bank sketched a new loan plan intended at sustaining growth industries to improve the nation's prospective monetary growth.

The BOJ made a decision at its policy meeting this week to lend around 3 trillion Yen ($33 billion) to commercial banks in the new loan program, under which it will proffer one-year loans at 0.1% interest rate.

Members accepted that the consequences on Japan's economic conditions of the augmented strains in European fiscal markets shooting from the Greece's debt calamities had so far been restricted to growth in the stock market, and that monetary conditions had continued to exhibit indications of relieving.

Some members underlined the significance of bearing in mind the probability that financial conditions in Japan may tauten through various economic and fiscal mediums if European economic markets got more unsteady and this led to an increase in the Yen and feeble stock prices.