The ruling Liberal Democratic Party on Friday called on the Bank of Japan not to scrap its "zero-interest-rate" policy at the next meeting of its policymaking panel Monday, warning that lifting the policy too soon may cause excess anxiety and smother the nation's nascent economic recovery.
LDP lawmakers made the call at a joint meeting of the Investigation Committee for the Finance and Banking Systems and the Finance Division.
At the onset of the meeting, Minoru Masubuchi, an executive director of the BOJ, explained the purpose of the policy.
Hideyuki Aizawa, a House of Representatives member who chairs the committee, told reporters after the meeting that the party asked Masubuchi to convey to BOJ Gov. Masaru Hayami the party's opinion.
Changes in policy are made by a majority vote of the nine-member BOJ Policy Board.
Under the "zero-interest-rate" policy, adopted in February 1999 as an emergency measure, the BOJ has been guiding its target rate for unsecured overnight bank lending to as low as possible to boost the economy.
The BOJ maintains it will discontinue the policy when an end to deflationary fears is in sight.