Bank of Japan Governor Haruhiko Kuroda said the central bank has ample room to expand stimulus further and is prepared to cut interest rates deeper into negative territory, signalling a readiness to act again to hit his ambitious inflation target.
Even after deploying what he described as “the most powerful monetary policy framework in the history of modern central banking,” Kuroda said he remained open to devising new means to revive the economy if existing tools did not work.
“If we judge that existing measures in the toolkit are not enough to achieve (our) goal, what we have to do is to devise new tools,” Kuroda said in a speech at a seminar on Wednesday.
“I am convinced that there is no limit to measures for monetary easing,” he said.
The BOJ chief said although Japan’s economy was recovering moderately, it was taking longer than expected to achieve his 2 percent inflation target due to slumping energy costs.
While offering few clues on the trigger for further monetary easing, Kuroda said the recent global markets rout and slowing emerging economies could hurt Japanese business sentiment and discourage firms from boosting wages.
“What’s important is how (such external risks) could affect confidence,” he said. Read more
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