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Japan policymakers to meet on markets, Bernanke to talk with Abe

Published 07/07/2016, 11:36
Updated 07/07/2016, 11:41
© Reuters.  Japan policymakers to meet on markets, Bernanke to talk with Abe

By Minami Funakoshi

TOKYO (Reuters) - Senior Japanese policymakers will discuss global market developments on Friday and former Federal Reserve Chairman Ben Bernanke will have talks in Tokyo next week with officials including Prime Minister Shinzo Abe, government sources said.

The meetings underscore the concern government officials have about damage that the recent market rout, triggered by the Brexit vote, could inflict on Japan's fragile economic recovery.

Officials from the Ministry of Finance, Financial Services Agency and the Bank of Japan will meet Friday at 9:30 a.m. (0030 GMT) to exchange views including on how the government should respond to the yen's appreciation, the sources said.

The last time they met was on June 25, shortly after Britain voted to leave the European Union, a decision that jolted financial markets and boosted investors' demand for the safe-haven yen .

Separately, Bernanke, who led the Fed through the global financial crisis in 2008, will be in Japan next week. It has been arranged for him to meet officials including Abe and Bank of Japan Governor Haruhiko Kuroda, according to a government official speaking on condition of anonymity.

Bernanke is expected to discuss Brexit and the BOJ's negative interest rate policy with Abe and Kuroda, the official said.

Some market players speculate Kuroda might decide, in a surprise, to provide "helicopter money" - a term coined by American economist Milton Friedman and cited by Bernanke, before he became Fed chairman, when talking about how central banks might finance government budgets as a way to seek to fight deflation.

The BOJ governor has repeatedly denied that the BOJ would adopt such a policy, saying it is as an "impossible" option under current law separating the government's role in fiscal policy from the BOJ's in monetary policy. [nL3N18C00L]

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