Normalization Not in Sight 9 Yrs after Start of Massive BOJ Easing

Politics Economy

Tokyo, April 7 (Jiji Press)--While Monday marked nine years since the Bank of Japan began its unprecedented massive monetary easing, discussions about a possible normalization of policy remain off the table although U.S. and European central banks are starting monetary tightening to rein in inflation.

Meanwhile, traditional concerns about a strong yen among bureaucrats, politicians and business people are now being replaced by fears of a "bad weakening of the yen," which reflects gaps between Japanese and foreign interest rates and leads to higher prices for crude oil and other imported goods.

In the ultraeasy policy, the BOJ is supplying ample liquidity mainly by purchasing massive amounts of outstanding Japanese government bonds from financial institutions through its money market operations.

In a press conference on March 18, BOJ Governor Haruhiko Kuroda ruled out the central bank raising interest rates to be in step with its counterparts in the United States and Europe. "There is no need to raise interest rates now, and I don't think that a growing interest rate difference will immediately lead the yen to weaken," he said.

He also said that the weak yen continues to have a positive impact on the economy, despite it pushing up prices in Japan.

[Copyright The Jiji Press, Ltd.]

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