MNI POLICY: BOJ Kuroda Makes It Clear More Easy Policy Stance

     TOKYO (MNI) - Bank of Japan Governor Haruhiko Kuroda said Thursday that the

BOJ made it clear its stance of conducting additional easy policy without

hesitation through the new forward guidance.

     "Judging from current economic and financial conditions, the BOJ would need

to maintain the easy policy beyond spring 2020 and the BOJ changed the forward

guidance," Kuroda said.

     "The BOJ stance of conducting easy policy doesn't retreat from the previous

stance," although the BOJ didn't conduct additional easing policy on Thursday,

Kuroda said.

     Earlier in the day, the BOJ board left policy unchanged, rejecting the

chance to buy some insurance and take preemptive policy action as it maintained

the view that the recovery was continuing as solid domestic demand continued to

underpin a recovery, even as downside risks remained.

     --TWEAKING GUIDANCE

     The BOJ did tweak its forward guidance, indicating that it will tolerate

policy rates moving below the current levels.

     "As for the policy rates, the BOJ expects short- and long-term interest

rates to remain at their present or lower levels as long as it is necessary to

pay close attention to the possibility that the momentum toward achieving the

price stability target will be lost," the BOJ said.

     The previous forward guidance was that the BOJ will maintain the current

easy policy "at least around spring 2020."

     Other key points from Kuroda's presser:

     --No further increase in the possibility of lost momentum toward achieving

the price stability target. BOJ must pay attention to the risk that the price

momentum will be lost given sustained slowdown in overseas economies.

     --The previous forward guidance was the BOJ maintains the easy policy

"until at least around spring 2020" and the BOJ needed to lengthen the period of

the forward guidance, judging from the heightened downside risks to the global

economy.

     --Kuroda also cited four policy tools as additional easy policies, such as

lowering the short- and long-term policy interest rates, expanding asset

purchases and accelerating the pace of injecting monetary base.

     --BOJ will consider additional easy policies though the BOJ board didn't

discuss additional easy policy.

     --The board members didn't discuss policy that the BOJ shortens the 10-year

interest policy rate to medium-term interest rate.

     --The June Tankan business sentiment survey and the branch managers'

meeting showed that domestic demand remains solid and the impact of the slowdown

in overseas economies on domestic demand is being limited.

     --Capital investment related to urban redevelopment projects, labor-saving

investment to address labor shortage and research and development investment for

growth areas, remain solid.

     --"Downside risk to overseas economies has heightened but its impact on

domestic demand is being limited," Kuroda said, adding the global recovery seems

to be delayed by about six months than expected.

     --Trade between the U.S. and China has somewhat improved, which have

positive impact on financial markets, but trade frictions will remain in the

long term. 

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

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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