Japanese politicians need to find ways to boost economic growth ( Inflation )

Japanese politicians need to find ways to boost economic growth and can not have legislation that would reduce the independence of the Bank of Japan to cure deflation, a ruling Democratic Party of Japan, said the legislator.

"We can not expect Japan's economy to overcome its difficulties because the law is revised - the problems are not so simple," said Shinichiro Furumoto, 45, chairman of the DPJ panel fiscal policy and finance, in an interview November. 26 in Tokyo. "Only the application of quantitative easing and the yen producing not stimulate demand."

Some lawmakers and the opposition wants to revise the BOJ law to force the central bank to adopt an inflation target to help win more than a decade of falling prices. Furumoto feedback signal DPJ lawmakers call for change can be difficult to convince party members that shape economic policy.

Discussions on the degree of influence that the government should have on monetary policy must be conducted "with care" and people should be aware that central bank independence is guaranteed by current law, said Furumoto, whose panel responsible for making recommendations to the government fiscal policy.

Some 150 lawmakers from the DPJ, who call themselves the league to combat deflation, said last week the Bank of Japan should adopt an inflation target to eradicate the decline in prices and boost employment. opposition group of his party this month introduced a bill to the diet calling for a revision of the law.

Tax Incentives

The government needs to boost personal consumption through subsidies and tax incentives that are similar to recent incentive programs have promoted the purchase of fuel-efficient cars and electronic products, Furumoto said.

The lawmaker said the DPJ consumption boost "will create the demand for money" and is "only demand so that the policy of printing money will stand."

Bank of Japan, Masaaki Shirakawa said today that the increase in growth expectations between business and consumers and the demand for recovery are crucial to overcoming deflation.

Japanese companies have 164000000000000 yen ($ 1.95 billion) in cash on hand because they have not found attractive investment options, said in a speech in Nagoya, central Japan.

The ruling party is considering increasing inheritance taxes while reducing gift taxes to encourage older generations to pass wealth to younger people who have more incentive to buy cars, houses and property, Furumoto said.

Despite increased calls by politicians for a review of the Bank of Japan Law, the Prime Minister Naoto Kan and Yoshihiko Noda finance minister have openly discussed the need to review the objectives of central bank policy.

Government Views

Furumoto, who also served as parliamentary secretary to the Ministry of Finance said the government's views on the economy have been reflected in the policy of the Bank of Japan due to Khan and Noda have been in close contact with central bank officials.

"Some argue that the Bank of Japan is doing what she wants because she is protected by its independence," said Furumoto. "But that would imply that the prime minister and finance minister have not played any role in politics, and I do not agree with the opinion."

Furumoto also said the Bank of Japan and the adoption of a similar price to inflation targeting, with board members saying they consider price increases of around 1 percent as stable. The bank last month agreed to maintain a "policy of virtually zero rate" to a point of view arises from sustained price increase.

Governments of countries like the United Kingdom and New Zealand set inflation targets for central banks and banks to decide for themselves the policy steps needed to achieve those goals. The Bank of England governor must write a letter of explanation to the Treasury, inflation can not be kept within limits.

The Bank of Japan, 1998, the Act strengthened the bank's independence, ending the government's authority to fire the governor and deputy chiefs and their right to oversee the operations of the Bank of Japan. He claims that the bank should strive to achieve "price stability, thereby contributing to the healthy development of national economy."

Furumoto said the law can be interpreted as it is part of the mandate of the Bank of Japan to support employment, although not explicitly say so, because the policies to stabilize prices can also create jobs.