Hirohisa Fujii, minister of finance: despite his jovial expression at Tuesday’s press conference, he highlighted ‘down to earth’ economic assessments

Japan’s minister of finance on Tuesday highlighted differences with the Bank of Japan over the state of the economy, suggesting ongoing concern about the central bank’s moves toward ending special measures introduced in response to the global financial crisis.

In a speech Hirohisa Fujii portrayed the Bank of Japan as overly upbeat, and told regional ministry officials that their assessments were more “down to earth” than those of the BoJ, which had said the economy was “getting better”.

In its latest monthly report on the economy, the BoJ declared it had “started to pick up” and that conditions were “likely to improve gradually”.

The finance ministry on Tuesday itself upgraded its assessment of the state of the economy for the second quarter running, but used more cautious language, saying its July to September survey by 11 regional offices found that “while the situation is severe, there are signs of recovery in some areas such as production activity”.

Government data released last month showed Japan’s economy grew by 0.6 per cent quarter-on-quarter between April and June, and economists expected it to have continued to expand in the third quarter.

However, Mr Fujii’s critical view of the BoJ’s assessment comes amid signals of concern about the central bank’s growing desire to bring to an end special measures intended to ensure businesses have access to credit.

The package of corporate finance support measures, which include cheap credit for banks and outright purchases of commercial paper and corporate bonds, are intended to ensure businesses are not starved of credit by risk-shy banks and markets.

But the measures, which have twice been extended and are now scheduled to expire in December, have drawn little market interest in recent months amid a general easing of credit conditions, and BoJ officials increasingly believe that they can now be safely discontinued.

The BoJ has no plans to hike the central bank’s meagre 0.1 per cent policy interest rate, with officials stressing that ending the corporate paper and bonds purchases would not mean a change to the bank’s “accommodative” monetary policy. Kiyohiko Nishimura, BoJ deputy governor, said in a speech last week: “The Japanese economy has just started to pick up, and on the monetary policy front it is vital that the [BoJ] secures the accommodative financial environment for an extended period to facilitate the return of the economy to a sustainable growth path.”

However, talk that the BoJ would soon end the special measures has worried some in government, with Shizuka Kamei, the outspoken minister for financial services, earlier this month accusing the central bank of “talking in its sleep”.