2021年11月27日

BoJ governor: Cautiously optimistic about global and Japanese economy

Bank of Japan Governor Haruhiko Kuroda sounded a cautiously optimistic note on the economy on Tuesday, saying global and Japanese growth was recovering from damage caused by the new pandemic thanks to aggressive stimulus measures.

Mr. Kuroda was reported to have told a seminar that Japan’s economy would show ‘clearly positive growth’ in the new fiscal year starting in April, thanks to strong global trade and domestic demand for durable goods. “The global economy is rebounding, Japan’s economy is rebounding,” Mr Kuroda said. “A recovery in the U.S. economy is positive for Japan and for global growth.” But Mr Kuroda stressed that the BoJ was determined to maintain its massive stimulus programme and would “not hesitate” to take additional easing measures if risks derailed Japan’s economic recovery. “Uncertainties remain as a result of the COVID-19 outbreak, and we will closely monitor the market and economic developments at home and abroad,” Kuroda said.

The report also noted that Kuroda’s bullish comments followed the BoJ’s decision earlier this month to make its policy tools more sustainable as the novel coronavirus pandemic elongated the bank’s struggle to reach its 2 per cent inflation target. One aim of the policy review is to ease the rising costs of a long period of accommodative policies, such as ultra-low interest rates, which have put pressure on financial institutions’ profit margins.

Critics of Mr. Kuroda’s aggressive policies have called for the BOJ to abandon its 2 percent inflation target and start paying more attention to the damage low interest rates are doing to Japan’s banking system, the report said. Kuroda refuted such views, saying monetary policy must focus on achieving price stability. “Price stability can be achieved through monetary policy, while a sound financial system can be achieved through macroprudential tools,” Mr. Kuroda said. Kuroda also indicated the Bank of Japan will not scale back stimulus just to mitigate the side effects on banks.

Japan’s economic performance is expected to contract in the current quarter due to weak consumer demand after a rebound from the outbreak, the report said. The outlook remains uncertain, but analysts expect strong exports to make up for some of the weakness in domestic consumption.

In addition, the Bank of Japan will release its latest quarterly growth and inflation forecasts at its April 26-27 policy meeting, the report said. (Xin Xin Jingwei APP)

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