BOJ board members concerned over Europe's financial woes

Several members of the Bank of Japan policy board at a crucial meeting said Japan could be affected by eurozone financial strains stemming from Greece's debt crisis, in the form of a stronger yen and weaker stock prices.

Several members of the Bank of Japan policy board at a crucial meeting said Japan could be affected by eurozone financial strains stemming from Greece's debt crisis, in the form of a stronger yen and weaker stock prices.

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Some members "underscored the importance of bearing in mind the possibility that financial conditions in Japan might be forced to tighten through various economic and financial channels if European financial markets became more unstable and this resulted in an appreciation of the yen and weaker stock prices," according to the minutes of the May meeting released today.

The minutes are for the Policy Board meeting on May 20 and 21, when the central bank -- to help Japan's economy recover and exit from deflation -- unveiled an outline of a new measure aimed at encouraging financial institutions to boost lending in growth areas, and decided to maintain its key interest rate at 0.1 per cent.

It also notes some members said the Greek problem should serve as a lesson that it is important "to make efforts to fully gain market confidence in fiscal sustainability, bearing in mind that market conditions could suddenly change."