BOJ Highly Wary of Eurozone Crisis: 2010 Board Minutes

Politics

Tokyo, July 31 (Jiji Press)--Bank of Japan policymakers, at their extraordinary meeting on May 10, 2010, were highly wary of the impact of the Greek financial crisis on the Japanese economy, according to detailed minutes of the BOJ Policy Board meeting released Friday.

The policy setters, concerned of global stock market drops triggered by the Eurozone crisis, decided at the meeting to join the five-way dollar liquidity swap line arrangements that were formed among central banks in the West.

"It is an urgent priority for us to prevent (the financial crisis) from spreading to the domestic market at all costs," then BOJ policymaker Tadao Noda said at the meeting.

The crisis was triggered when a change in government in Greece in October 2009 led to revelations of the country's massive government debts that had been underreported. The debt crisis soon spread to Portugal, Spain and other nearby countries, heightening the "sense of caution regarding sovereign risk," according to then BOJ Governor Masaaki Shirakawa.

It was against the backdrop of risk aversion accelerating that the BOJ Policy Board held the May 10 meeting.

[Copyright The Jiji Press, Ltd.]

Jiji Press