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TOKYO (MNI) - Bank of Japan Governor Haruhiko Kuroda said Wednesday that
the BOJ will persistently maintain the current easy policy, while keeping a
close eye on both its positive and side effects.
"This is exactly the kind of situation in which policy sustainability and
durability are important," Kuroda said at the meeting of Councilors of Japan
Other key points from Kuroda's speech:
--"It is necessary to maintain a positive output gap - a driver for
inflation - for as long as possible under the current framework of QQE with
yield curve under control and thereby firmly sustain the momentum toward 2%
--"It is likely to take more time than expected to achieve the price
stability target while uncertainties regarding the outlook have heightened
further. However, firmly maintaining the momentum toward achieving 2% inflation
through such policy conduct will ultimately help to ensure that the price
stability target is achieved at the earliest possible time without putting an
excessive burden on the real economy and the functioning of financial
--"The economy is already not in deflation in the sense of a sustained
decline in prices. However, prices have continued to show relatively weak
developments compared to the economic expansion and the tightening of the labor
--It is still taking time to achieve the 2% price stability target.
"Downside risks mainly regarding overseas economies have come to warrant further
--"The BOJ needs to pursue the monetary policy that is most appropriate to
the situation at the time while weighing its benefits and costs."
--"The BOJ is aware that prolonged downward pressure on financial
institutions' profits, with the low interest rate environment and severe
competition among financial institutions continuing, could create risks of a
gradual pullback in financial intermediation and of destabilizing the financial
--These risks are judged as not significant at this point as financial
institutions have sufficient capital bases. But the BOJ continues to carefully
watch future development.
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