Bank of Japan calls emergency policy meeting Monday as yen keeps rising

Bank of Japan holds emergency policy meeting

TOKYO — The Bank of Japan is holding an emergency meeting Monday as political pressure mounts for the central bank to ease monetary policy in the face of a surging yen.

In a statement on its website, the bank said the meeting is scheduled for 9 a.m. in Tokyo (0000 GMT; 8 p.m. EDT Sunday). The bank had been expected to convene Sept. 6 at a scheduled two-day policy board meeting.

The news sent Japanese stocks soaring. The Nikkei 225 stock average finished the morning session up 3.1 percent at 9,265.39.

The Japanese government has not intervened in foreign exchange markets since 2004, but Japan’s export-driven economy faces growing uncertainty due to a strong yen and slowing global growth. The yen hit a fresh 15-year high versus the dollar last week.

Sustained strength in the yen is toxic to vital exporters such as Toyota Motor Corp. and Sony Corp. because it erodes their international profits and makes their goods less competitive abroad — which could undermine the country’s shaky recovery. In the April-June quarter, Japan lost its place to China as the world’s No. 2 economy after posting annualized growth of just 0.4 percent.

Japanese Prime Minister Naoto Kan on Friday made his strongest comments so far on the yen’s recent spike. He told reporters that Japan would take “decisive action” when necessary against excessive foreign exchange volatility. He is meeting with Bank of Japan Gov. Masaaki Shirakawa this week. Kan’s staff is working on new stimulus measures, and an outline will be decided Tuesday.

Expectations have been growing that Japan’s monetary authorities will do something to stem the yen’s rise, particularly after new government figures last week showed that the country’s export growth lost momentum in July. Japanese leaders held an emergency meeting but emerged with few hints of an immediate response.

Analysts have said the central bank will most likely decide to boost liquidity by expanding a short-term low-interest loan program for financial institutions.