JAPAN PRESS: BOJ Kuroda: No Rate Hike for Long Period

--BOJ Kuroda: Downside Risks To Global Growth Higher Than Before

     TOKYO (MNI) - Bank of Japan Governor Haruhiko Kuroda said the BOJ will not

raise interest rates for an extended period, confirming the bank's latest policy

stance, the Yomiuri Shimbun reported on Saturday.

     Kuroda also warned that downside risks to the global economy are higher

than in the spring (around April) in the face of the U.S.-China trade dispute

and fund outflows from emerging economies.

     In an interview with the newspaper on Friday, Kuroda said, "We have no

plans to raise interest rates for a fairly long period."

     Raising rates soon "would not have a positive impact on the economy and

financial institutions," he said.

     Asked how long is an "extended period" during which the bank will maintain

its forward guidance adopted at its July 30-31 policy meeting, Kuroda replied,

"We don't set any specific timeframes, such as 1 year, 3 years or 5 years. We

are committed to continuing the current low interest rates as long as

uncertainties persist."

     He also said it would be appropriate for the BOJ to achieve its 2%

inflation target before his second five-year term ends in April 2023.

     The bank set the target in January 2013 but has so far failed to lift the

year-on-year rise in the core CPI (excluding fresh food) beyond 1.5%, despite

aggressive easing it launched in April 2013.

     At the July meeting, the BOJ board decided in a 7-to-2 vote to make its

long-term interest rate target and asset purchases more "flexible," allowing the

nearly flat Japanese government bond yield to steepen slightly in line with

firmer growth and inflation.

     The BOJ adopted "forward guidance" for the policy rates to show that it is

"strengthening its commitment" to guiding low inflation to its stable 2% target.

This should help the bank "persistently continue" aggressive monetary easing as

the stubborn deflationary mindset lingers among businesses and households.

     By adopting forward guidance, the BOJ also vowed to maintain super-low

interest rates "for an extended period" to counter uncertainties including the

drag from the sales tax hike planned in October 2019

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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