MNI POLICY: BOJ's Kuroda Still Optimistic on Economy

Bank of Japan Governor Haruhiko Kuroda has maintained his optimistic view on the outlook for Japan's economy despite the second state of emergency, but in remarks on Thursday he said the bank would not hesitate to take further easing measures if necessary.

ECONOMY

Kuroda said that Japan's economy has picked up and the economy is likely to follow an improving trend , but the pace of improvement is expected to be only moderate while parts of the economy remained locked down due to the pandemic.

He said the BOJ board would examine the impact of the second state of emergency on economic activity and prices at the two-day policy meeting ending on Jan. 21, and review the medium-term growth and inflation outlook.

MONETARY POLICY

"For the time being, he BOJ will closely monitor the impact of Covid-19 and will not hesitate to take additional easing measures if necessary, and also it expects short- and long-term policy interest rates to remain at their present or lower levels," Kuroda said.

FINANCIAL CONDITIONS

The BOJ Governor said that financial conditions had been accommodative on the whole, but those for corporate financing have remained less so, as seen in weakness the financial position of Japanese corporates.

PRICES

Japan's core inflation rate is expected to be negative for the time being due to the impact of the past drop in crude oil prices and the 'Go To' travel campaign.