Press Conference by the Chief Cabinet Secretary (Excerpt)

Q&As

• The Monetary Policy Meeting of the Bank of Japan (BOJ) and an agreement between the Government and the BOJ
• Chinese vessels' movement around the Senkaku Islands

(Abridged)

REPORTER: The Monetary Policy Meeting of the Bank of Japan (BOJ) has just been held and an agreement between the Government and the BOJ-I do not know whether it would be proper to call it an accord-has been concluded on measures aimed at overcoming deflation. What is the view of the Government with regard to this agreement?

CHIEF CABINET SECRETARY FUJIMURA: I will give you the details concerning the Monetary Policy Meeting of the BOJ. Firstly, at today's meeting it was decided to increase the total size of the Asset Purchase Program by about 11 trillion yen. Secondly, and contrary to expectations this is something that may not have been well understood yet, it was also decided to examine the specifics of establishing a Framework for the Fund-Provisioning Measure to Stimulate Bank Lending ("Stimulating Bank Lending Facility"), for which there shall be no set upper limit, with the anticipation that the facility will be on a scale of around 15 trillion yen. Given the fact that these decisions represent bold policy measures above and beyond those previously implemented to provide additional monetary easing, the Government welcomes the decisions made at the meeting. Also, your other question concerning the joint announcement by the Government and the BOJ of a document concerning measures aimed at overcoming deflation. This document, in which the Government and the BOJ set forth measures for overcoming deflation as early as possible, is possibly the first time that the BOJ has issued a document that uses the phrase "as early as possible." The document confirms that both the Government and the BOJ share the recognition that overcoming deflation is a critical challenge for Japan's economy, and they state jointly that the Government and the BOJ will work together and make their utmost efforts to address this challenge, also clarifying their respective specific roles. I consider that the document represents a shared understanding between the Government and the BOJ. In general, the points I have just mentioned, namely the first (about the Asset Purchase Program), the second (about the "Stimulating Bank Lending Facility") and the third (about measures aimed at overcoming deflation) are those that were announced today.

REPORTER: You have noted that the document represents a shared understanding between the Government and the BOJ, which is slightly different to a policy agreement or an accord. Even so, what is your opinion about the significance, or the advisability of the compilation of such a document from the perspective of the independence of the BOJ?

CHIEF CABINET SECRETARY FUJIMURA: This announcement is something that the Government welcomes. In other words, it is a document that declares to Japan and the world that the BOJ and the Government are both resolved to work together and to make powerful efforts to address the challenge of overcoming deflation. You could say that they have formed a "scrum" to address the situation. You have just mentioned the word "accord," but this gives rise to the question about the definition of the word "accord." I find it difficult to respond to this question about an "accord," but what I would reiterate is that the document is a joint statement to Japan and to the world about a shared understanding between the Government and the BOJ that they are resolved to work together and to make maximum efforts.

(Abridged)

REPORTER: Yesterday in his policy speech the Prime Minister referred to "breaking out of the deflationary economy." To what extent does the decision made by the BOJ today reflect communications that have taken place between the Prime Minister and the Governor of the BOJ?

CHIEF CABINET SECRETARY FUJIMURA: Rather than referring to points being reflected, I hope you understand that it is a document that was jointly issued that sets out the shared recognition and understanding of the two parties.

REPORTER: Can we understand that the wishes of the Prime Minister have been most strongly reflected in the document?

CHIEF CABINET SECRETARY FUJIMURA: I believe it to be the case that the wishes of both parties have been set out as a shared understanding.

REPORTER: On a related note, the same Monetary Policy Meeting has indicated an outlook that the target for the inflation rate will fail to reach one percent by fiscal 2014. What is the Government's reaction to this outlook?

CHIEF CABINET SECRETARY FUJIMURA: Measures to overcome deflation are being implemented in the midst of a heightening sense of uncertainty in the global economy, including further downside risks and others. It is for this reason that the BOJ has made such a judgment at this time. However, the BOJ and the Government have confirmed today that they will work together and make their utmost efforts to overcome deflation as early as possible. We must therefore not just look at the current circumstances, but must survey the situation over the longer term.

REPORTER: On the same issue of the inflation rate not reaching one percent by fiscal 2014, this is the same fiscal year in which preparations are being made to implement the first rise in the consumption tax. What impact do you think today's outlook, albeit the current outlook, will have on the Government's plans to raise the consumption tax?

CHIEF CABINET SECRETARY FUJIMURA: As I have responded on numerous occasions in the Diet, a decision to raise the consumption tax will be made ultimately by the Government Administration at such a time. Supplementary Provision 18.3 of the bill relating to the increase in consumption tax stipulates that a decision should be made that takes into comprehensive account the various economic factors and indicators, including nominal and real growth rates, price trends, and other factors that may not be apparent through economic indicators. Therefore, now is not the time to leap to conclusions about these various factors and indicators.

(Abridged)

REPORTER: Chinese vessels have once again entered Japan's territorial waters. Could you give us the status of today's incursion?

CHIEF CABINET SECRETARY FUJIMURA: Today, from around 10:52 am to 11:05 am, four Chinese "Haijian" maritime patrol vessels consecutively entered into Japanese territorial waters near Uotsuri Island. By around 1:22 pm, all vessels had left Japanese territorial waters. As of 3:00 pm today, a total of five Chinese official vessels are confirmed to be sailing in waters in the contiguous zone in the vicinity of the Senkaku Islands. They comprise four "Haijian" maritime patrol vessels and one "Yuzheng" patrol ship of China's Fishery Agency. For further details concerning foreign vessels in the waters around the Senkaku Islands, please direct your questions to the Japan Coast Guard.

REPORTER: What kind of protest has the Government issued to the Chinese government?

CHIEF CABINET SECRETARY FUJIMURA: Naturally a protest has been lodged concerning the fact that Chinese vessels entered Japanese territorial waters.

REPORTER: Would that be via the Ministry of Foreign Affairs?

CHIEF CABINET SECRETARY FUJIMURA: Yes, through diplomatic channels.

REPORTER: Other than Chinese government-related vessels, what is the status of other vessels in Japanese territorial waters or the contiguous zone, for example private sector Japanese vessels or Chinese fishing vessels?

CHIEF CABINET SECRETARY FUJIMURA: The Government is aware of various circumstances concerning other vessels, but I cannot divulge the details.