Trial now

Approaching Recent Highs


CIBC, Toyota Launched


Bearish Focus


The Bank of Japan should be nimble in making an effective response when needed to counter possible changes in economic activity and prices, or financial conditions. Governor Haruhiko Kuroda told a business leaders conference Thursday.

Kuroda also noted that the assessment for further "effective and sustainable monetary easing with a view to achieving the price stability target of 2%. Its findings will be made public, likely at the March 2021 MPM."


Addressing deflation issues, Kuroda said the BOJ believes prices "will not see an overall and sustained decline; in other words, the economy will not return to deflation. However, attention should also continue to be paid to price developments given that the pace of economic improvement is only moderate and uncertainties over the economic outlook are significant", although he accepted ongoing Covid-19 concerns needed to be watched.

"In addition, there are uncertainties over whether, while the impact of Covid-19 remains, growth expectations will not decline substantially and financial system stability will be maintained. Thus, the Bank will continue to closely examine economic developments at home and abroad," Kuroda added.


Prolonged low interest rates have a negative impact on financial institutions' profits, and purchases of various assets such as JGBs and ETFs affect the market functioning, therefore, "such costs or side effects need to be minimized." Kuroda said.

"That said, the management goals cannot be achieved only by curbing costs. I believe business management is about producing significant positive effects at low costs. Anything that is unnecessary and inefficient should be avoided, but the focus of our assessment is not on lowering costs or mitigating side effects."

"Instead, the BOJ will adopt a forward-looking perspective of how to achieve stability in economic activity and prices by pursuing further effective monetary easing while mitigating side effects," Kuroda added.

"Central banks have conducted monetary easing measures, and their responses have two things in common. One is providing support for financing to firms and sole proprietors affected by Covid-19 so that they can sustain their businesses. The other is maintaining stability in financial markets in order to prevent a vicious cycle between turmoil in the markets and deterioration in the real economy," he added.