The Bank of Japan (BOJ) Haruhiko Kuroda is back on the wires now, via Reuters, making some comments on the negative interest rates and the central bank’s yield curve control program.
Hard to see Japan’s consumer inflation reaching 2% even in 2023.
Yield curve control program, negative rates won't be changed in review.
When inflation reaches 2%, it's natural for long-term interest rates to rise.
Natural rise in long-term rates could push up cost of issuing debt, but that is something government must accept.
BOJ’s negative rate policy is effective in keeping short-term rates stably around -0.1% and maintaining long-term rates at low levels.
Japan's regional banks have sufficient capital buffers, but there is risk prolonged downward pressure on profits could hurt financial intermediation.
We are aware of various problems being pointed out about our ETF buying, but the policy has had positive impact on economy, prices.
BOJ has no plan now to end ETF buying or permanently reduce purchases.
USD/JPY trades with modest gains around 105.50, little affected by Governor Kuroda’s comments.
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