BOJ Governor Kuroda’s comments at news conference

Economy

FILE PHOTO: Bank of Japan (BOJ) Governor Haruhiko Kuroda attends a news conference at the BOJ headquarters in Tokyo, Japan July 30, 2019. REUTERS/Kim Kyung-Hoon/File Photo
FILE PHOTO: Bank of Japan (BOJ) Governor Haruhiko Kuroda attends a news conference at the BOJ headquarters in Tokyo, Japan July 30, 2019. REUTERS/Kim Kyung-Hoon/File Photo

(Reuters) - The Bank of Japan on Friday widened the band at which it allows long-term interest rates to move around its target, as part of a raft of measures to make its ultra-easy policy more sustainable amid a prolonged battle to fire up inflation.

Following are excerpts from BOJ Governor Haruhiko Kuroda’s comments at his post-meeting news conference, which was conducted in Japanese, as translated by Reuters:

LONG-TERM INTEREST RATES

“If limited to a certain range, long-term interest rates can fluctuate without diminishing the impact of monetary easing and help enhance market functions. This is what we found out in our review.”

ECONOMIC OUTLOOK

“Japan’s economy remains in a severe state due to the impact of the pandemic, but picking up as a trend ... It is expected to improve as a trend as the pandemic’s impact subsides.”

INCENTIVES TO FINANCIAL INSTITUTIONS

“If we cut rates and deepen negative rates, that could have an impact on financial institutions’ profits. To prevent this from hurting lending, we decided to offer incentives (to financial institutions) with a new scheme. This is aimed at encouraging financial institutions to boost lending.”

NEGATIVE RATES

“Some people say the BOJ cannot deepen negative rates because of the side-effects. That’s not true. I don’t think it’s impossible to deepen negative rates.”

ON INFLATION TARGET

“We will maintain our 2% inflation target, and will continue with our powerful easing patiently to achieve it at the earliest date possible. Our steps announced today will make our monetary easing framework more effective and sustainable.”

ETF BUYING

“I don’t think our ETF buying has crippled functions in Japan’s stock market.”

“When we ramped up purchases last March, it had a huge positive effect. That’s why we decided to maintain the 12-trillion-yen ceiling, and buy ETFs more flexibly and in a nimble fashion. Removing all numerical targets won’t necessarily allow us to buy flexibly. By having a sufficiently high ceiling, we showed we’re ready to buy massively and boldly.”

(Reporting by Leika Kihara; Editing by Devika Syamnath)

Reuters