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Minister doubts effectiveness of BOJ's ample fund supply.

TOKYO, Feb. 6 Kyodo

The minister in charge of economic and fiscal policy Tuesday voiced doubts whether the proposed ample supply of funds by the Bank of Japan (BOJ) to financial markets will be effective in stimulating corporate activities and helping boost the overall economy.

''Even if the BOJ provides a lot of funds, I doubt whether companies will be encouraged to borrow money,'' Taro Aso said at a regular news conference held after a cabinet meeting.

''There are still many company managers who do not want to borrow money because they were bothered by banks' hesitance to lend money. Even if (the BOJ) makes funds overabundant when there is no demand from borrowers for money, does it make sense?'' he said.

At Friday's meeting of the Council on Economic and Fiscal Policy, the supreme body designed to decide on economic and budget policies, some members called for the central bank to supply ample funds in an effort to stimulate the stalled economy.

Aso said that BOJ Governor Masaru Hayami should have made public his opinions on its possible ample fund supply at the meeting.

Both Aso and Hayami are members of the council.

At the same time, there are opinions in the political and business circles that the BOJ should return to a policy of guiding the key unsecured overnight call money rate to near zero, which the BOJ ended last August after about 17 months, in view of the stalled economy.
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Publication:Japan Weekly Monitor
Date:Feb 12, 2001
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