BOJ Policy Package Helps Stabilize Sentiment

Nagoya, Nov. 29 (Jiji Press)--The Bank of Japan's latest monetary stimulus package, introduced in October, has helped stabilize corporate and consumer sentiment, BOJ Governor Masaaki Shirakawa said Monday.
The package is "likely to have been effective in stabilizing the sentiment of firms and households," which has been dampened by the yen's rise and the weakness of overseas economies, the BOJ head said in a speech to a business conference in this central Japan city.
By reducing unease, the package supports the economy's moves toward self-sustained recovery, Shirakawa also said.
The package, dubbed "comprehensive monetary easing," features a revival of the zero interest rate policy and a 5-trillion-yen program to buy assets including shares in real estate investment trust funds and exchange-traded funds.
The BOJ's promise to maintain the zero interest rate policy until price stability is in sight, clarified in the package, is expected to stabilize long-term interest rates, Shirakawa said, adding that it "could exert significant easing effects, especially when economic recovery progresses and corporate profits improve."
One of the biggest economic tasks for Japan is stopping a long-term downtrend of its economic growth rate, he said, calling for further efforts by companies, the government and the central bank.
Shirakawa also stressed the importance of free trade and economic partnership agreements to invigorate the Japanese economy.
In a question-and-answer session, Shirakawa said money supply and foreign exchange rates do not move together automatically.
But if market players come to appreciate the BOJ's stance of
maintaining the supereasy monetary policy patiently, foreign exchange rates will be affected, he added.