By Tetsushi Kajimoto

TOKYO (Reuters – The Bank of Japan should maintain the current monetary stimulus for sustainable price increases, corporate profits and job creation, said its deputy governor on Tuesday. He dismissed any speculation of a premature exit from accommodative settings.

The BOJ has been slow to reduce crisis-mode stimuli, despite Japan’s inflation being far lower than in other countries.

The BOJ’s current stimulus program may be rethought, as investors speculate that rising commodity prices worldwide and the weakness of the yen will increase the cost-push inflation.

Masayoshi Aamiya shrugged at the possibility of an early exit from stimulus policies.

Amamiya said that “What is important” was to keep our powerful monetary ease to firmly support households and businesses’ economic activity.

Amamiya stated that the current reduction in monetary stimulus would lead to downward pressure on economic activity, which could make 2% inflation seem even further away.

Amamiya, Shunichi Suzuki (finance minister) appeared in the same session of parliament. They warned against the rapid weakness in the yen and called recent excessive volatility on the foreign currency market “undesirable”.

Suzuki stated that he is in communication with the U.S. currency authorities and others to address currency movements as necessary, in accordance to the Group of Seven advanced currencies’ agreement.

The agreement requires market-determined currency rates. It also calls for consultation with G7 members regarding action in the currency markets.

Suzuki indicated that the Ministry of Finance is responsible for currency policies and has $1.35 trillion in foreign reserves. It can also use these funds to make currency interventions through BOJ.