(Adds quotes and details from policymakers' statement)
By Rajesh Kumar Singh
GREATER NOIDA, India, May 3 (Reuters) - Asian nations must
be on guard against excessive risk taking and asset bubbles fed
by central bank efforts to boost economic growth, major regional
economies including Japan and China said on Friday.
Central banks in countries including Japan, the United
States and Britain have been pumping out cheap money which has
driven investors to seek higher returns in emerging economies
around the world, driving up asset prices.
"We shall remain vigilant on the unintended negative side
effects stemming from extended periods of global monetary
easing," the ASEAN group of Southeast Asian nations, along with
Japan, China and South Korea, said in a statement after a
meeting in India.
They said they were prepared to adjust macro-economic policy
and if necessary adopt macro-prudential policies, which aim to
build resilience in financial systems during periods of rapid
credit growth and can include caps on leverage and
Memories of the 1997 Asian currency crisis that led to
economic collapse in much of the region mean policymakers are
sensitive to the risks of volatile fund flows.
The Bank of Japan stunned financial markets last month by
pledging to release about $1.4 trillion to end nearly two
decades of stagnation and deflation. Bank of Japan Governor
Haruhiko Kuroda said on Thursday he would monitor for any signs
of unintended spillovers on emerging economies.
The meeting, on the sidelines of the Asian Development
Bank's annual gathering, was not attended by China or South
Korea's finance ministers, which some observers blame on renewed
tension over several Japanese ministers' visits to a shrine for
A trilateral meeting between China, Japan and South Korea
was also called off.
(Reporting by Rajesh Kumar Singh; Writing by Frank Jack Daniel;
Editing by Ruth Pitchford)