BOJ’s Kuroda tell Suga March review aimed at sustaining easy policy

FILE PHOTO: Bank of Japan Governor Haruhiko Kuroda wearing a protective face mask attends a news conference as the spread of the coronavirus disease (COVID-19) continues in Tokyo, Japan, April 27, 2020, in this photo released by Kyodo. Mandatory credit Kyodo/via REUTERS

February 18, 2021

By Yoshifumi Takemoto

TOKYO (Reuters) – Japan’s central bank governor said on Thursday he told the country’s prime minister the bank would conduct a review of its policy tools in March to ensure it can maintain ultra-loose monetary settings for a long period.

Governor Haruhiko Kuroda said he also told Prime Minister Yoshihide Suga that the global economy appeared to be picking up, based on estimates issued by the International Monetary Fund.

“I explained to the prime minister the Bank of Japan would conduct a review (of its tools) to make its policy more effective and sustainable, and announce the findings at its March rate review,” Kuroda told reporters after meeting with Suga.

The BOJ governor and the prime minister hold meetings once every few months as a regular practice to exchange views on the economy and policy.

Kuroda’s comments about the review follow the BOJ’s December announcement that it would assess its policy tools in March as the hit to growth from the pandemic forces the central bank to maintain a massive and prolonged stimulus programme.

Kuroda said Suga did not have any particular comment on the BOJ’s March review and the two did not discuss the Tokyo Olympic Games.

He also told reporters that while service spending remains sluggish, Japan’s consumption was “picking up somewhat” and that exports and output were recovering to levels seen before the pandemic struck, Jiji news agency reported.

(Reporting by Yoshifumi Takemoto, Writing by Leika Kihara; Editing by Jacqueline Wong and Sam Holmes)

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BOJ’s Kuroda says no plan to ‘permanently reduce’ ETF buying

FILE PHOTO: Bank of Japan (BOJ) Governor Haruhiko Kuroda attends a news conference at the BOJ headquarters in Tokyo, Japan June 20, 2019. REUTERS/Kim Kyung-Hoon

February 16, 2021

By Leika Kihara

TOKYO (Reuters) – Japan’s central bank has no plans to “permanently reduce” its purchases of exchange-traded funds (ETF), its governor said on Tuesday, signalling that its upcoming policy review won’t lead to a radical change in its asset-buying scheme.

Bank of Japan Governor Haruhiko Kuroda also said the recent stock price rally reflected market optimism over the global economic outlook, brushing aside views its ultra-loose policy was fuelling an asset price bubble.

“Optimism over the global economic outlook and steady vaccine roll-outs may be behind the recent surge in stock prices,” Kuroda told parliament.

“But the global outlook remains highly uncertain,” he said, adding that risks to Japan’s economy remained skewed to the downside.

Japan’s stocks rose to a 30-year high on Tuesday in line with a global market rally reflecting hopes of big stimulus and steady vaccine rollouts.

The BOJ has unveiled a plan to review its policy tools, including its ETF-buying programme, in March to make it more sustainable as the COVID-19 pandemic forces it to maintain its stimulus for a prolonged period.

Kuroda said the review would address the side-effects of prolonged easing, as the hit to growth from the pandemic may keep his 2% inflation target elusive for years.

“It may be difficult for inflation to reach 2% in 2021, 2022 and even 2023,” Kuroda said. “It’s not as if our efforts have had no effect. But we need to do more, given the fact inflation hasn’t reached 2% despite eight years (of easing),” he said.

Kuroda’s second five-year term as BOJ governor ends in April 2023.

Core consumer prices fell 1.0% in December from a year earlier, marking the biggest drop in a decade, a sign of intensifying deflationary pressure.

Kuroda said it was premature to debate an exit from the central bank’s super-loose policy including the BOJ’s huge ETF purchases, as the pandemic continues to ravage the economy.

“Our ETF buying has had a positive impact on the economy and prices. We don’t have any plan to end or permanently reduce our purchases,” Kuroda said. “We’ll look into ways to address (the side-effects) at our March review,” he said.

Under a policy dubbed yield curve control, the BOJ guides short-term interest rates to around -0.1% and 10-year yields to around zero. It also buys huge amounts of assets such as ETFs as part of efforts to achieve its 2% inflation target.

The BOJ’s plan to review its policy tools in March reflects a growing concern among policymakers over the rising cost of extended easing.

Some analysts also criticise the BOJ for continuing its huge ETF buying at a time Tokyo stock prices have set new highs.

(Reporting by Leika Kihara; Editing by Kim Coghill, Ana Nicolaci da Costa and Giles Elgood)

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BOJ’s Kuroda warns second-round effect of COVID-19 may dent economic growth

FILE PHOTO: Bank of Japan Governor Haruhiko Kuroda takes questions from reporters at the annual meetings of the International Monetary Fund and World Bank in Washington, U.S., October 18, 2019. REUTERS/James Lawler Duggan

June 25, 2020

TOKYO (Reuters) – Bank of Japan Governor Haruhiko Kuroda said there was a risk the second-round effects of the coronavirus pandemic may push down the country’s economy “considerably”.

“It is essential to maintain Japan’s financial system stability and accommodative financial conditions” to combat lingering risks to the economic outlook, Kuroda said in an online seminar on Friday.

(Reporting by Leika Kihara; Editing by Chang-Ran Kim)

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