The Bank of Japan needs more time to assess the effect of its loan scheme targeting growth industries, its deputy governor said, a day after a fellow board member signalled that it could be expanded as the bank battles Japan's entrenched deflation.
Some BoJ officials do not rule out boosting the loan scheme if it continues to draw strong demand, given that nearly half of the 3 trillion yen ($36 billion) set aside will be disbursed this year - well before its expiration in 2012. But recent comments from BoJ policymakers show the central bank has yet to reach a consensus on how soon to expand the scheme, put in place in June as a long-term means of stimulating domestic demand, which has lagged in Japan's anaemic recovery.
BoJ board member Miyako Suda sounded more eager to boost the scheme on Wednesday, when she said there was room to make it more attractive, perhaps by increasing its size or reviewing the conditions for extending loans. "At present, money does not flow into risk (assets) unless the BoJ steps in, so we need to step in," Suda told a news conference in Yamagata, northern Japan.
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