Asia

Wednesday, July 8, 2020 - 22:00

MNI POLICY: BOJ Kuroda: Japan Economy To Remain Severe


TOKYO (MNI) - Bank of Japan Governor Haruhiko Kuroda has maintained his cautious view that economic conditions in Japan are expected to remain severe due to the impact of the coronavirus.

"Looking ahead, economic activities are expected to resume but (the) severe situation will likely continue for the time being due to the infectious disease," Kuroda said at the opening of the quarterly branch managers' meeting on Thursday.

He also said the BOJ will not hesitate to take additional policy easing measures if they are necessary to support the economy, while keeping a close eye on the impact of the coronavirus.

However Kuroda did not elaborate on when or how the bank would consider additional policy easing.

--MONETARY POLICY

Kuroda said the BOJ continues to make efforts not only to facilitate corporate financing but also to maintain the stability of the financial system.

He said the BOJ will closely monitor the impact of the coronavirus and will not hesitate to take additional easing measures if necessary. The Bank also expects short and long-term policy interest rates to remain at their present or lower levels.

--JAPAN ECONOMY

The BOJ Governor said Japan's economy remains in a severe situation but is expected to improve due to pent-up demand, accommodative financial conditions and the government's stimulus measures which will have an impact when the coronavirus wanes.

--PRICES

Kuroda said Japan's inflation rate, measured by core CPI, is expected to move into negative territory due to the impact of the coronavirus and the drop in crude oil prices.

But the inflation rate is expected to rise on the back of the improvement in the economy, he said.

--FINANCIAL SYSTEM

The nation's financial system remains stable and the financial environment continues to be accommodative, Kuroda said.

The degree of accommodative conditions in corporate financing, however, has fallen.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com
--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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