BOJ's Kuroda Is Keen To Further Expand The Monetary Policy
Intraday Market Moving News and Views (USD/JPY)
Apr 05, 2016 03:02GMT
Bank of Japan's Governor Haruhiko Kuroda told the parliament that market moves would be key factors the central bank would examine in deciding when and how it might next expand stimulus, and he stressed on his readiness to expand monetary policy still further.
Kuroda maintained his optimism that Japan's economy was recovering moderately, despite last week's Tankan survey which showed business mood souring on weak emerging market demand. The yen's recent rise was among factors that led to a deterioration in big manufacturers' business sentiment in the central bank's quarterly survey.
Kuroda reiterated BOJ's readiness to ease again if risks threatened prospects for accelerating inflation, which is now at a dead halt, toward its 2 percent target. Kuroda said BOJ would not hesitate to take action either by accelerating asset purchases, buying more risky assets or pushing interest rates deeper into negative territory.
While the BOJ would not pre-determine what steps it would take or how it could combine measures were it to ease again, Kuroda continued to say that developments in financial markets, as well as in the economy and in prices, would be key factors for the BOJ when deciding whether, when and how it would expand stimulus.
In January, BOJ stunned markets when it introduced negative interest rates, but the move has so far failed to boost stock prices or arrest an unwelcome rise in the yen.
Japan's business sentiment worsened in the three months to March and companies' inflation expectations weakened, keeping pressure on the central bank to do more.
Companies have also been reluctant to boost capital expenditure and wages, clouding the outlook for the success of premier Shinzo Abe's "Abenomics" stimulus policies. While wages rose for the first time in four months in February, they inclined by just 0.4 percent from a year earlier.
Japan's economy shrank in October-December last year on weak exports and consumption. Many analysts expect it to show another contraction in January-March, posting two straight quarters of negative growth and meeting the technical definition of a recession.