Politics of monetary easing likely to shrink BOJ's wiggle room

Tokyo

THE Policy Board of the Bank of Japan (BOJ) is due to meet on Wednesday against a backdrop of rising domestic and international concerns over the "politics" of aggressive monetary easing of the kind the Japanese central bank, the European Central Bank and others are now engaged in.

Some economists argue that Japan's unconvincing emergence from economic recession and deflation could warrant further easing, but analysts say that fears among members of the BOJ Policy Board that such action could trigger further falls in the yen and retaliatory actions are likely to limit action for the present.

South Korea is among Asian nations worst hit by the 30-per-cent fall in the value of the yen against the dollar since the BOJ launched massive monetary easing two years ago; this i…