MNI POLICY: BOJ Kuroda: No Need Of Policy Framework Review Now

     TOKYO (MNI) - Bank of Japan Governor Haruhiko Kuroda said Friday that he

sees no need to review either the policy framework and the 2% price target now.

     "I think the proposals by the IMF (International Monetary Fund) is rational

but I don't think it is necessary for the BOJ to review the policy framework

now," Kuroda told lawmakers.

     He added that it is premature to discuss an exit of the easy policy as

Japan hasn't yet achieved the 2% price target.

     "The BOJ will review as needed, including an exit strategy from the easy

policy. But reviewing the policy framework isn't necessary now," Kuroda said.

     The IMF has previously called on the BOJ to introduce an inflation target

range, instead of the current 2% price target, to increase the flexibility of

monetary policy, but Kuroda was dismissive.

     "The 2% target is a global standard. Central banks in major industrialized

nations are aiming at achieving the 2% price target. If a central bank adopts

inflation target range, it would be interpreted to mean that the bank aims at

achieving the lower end of the target range," Kuroda said.

     He added, that shortening the long-term interest rate target from 10-year

rate, as suggested by the IMF, could be possible in the future "but I have no

idea of changing it now."

     Kuroda added that the BOJ is managing monetary policy in a balanced manner,

while carefully monitoring both effects and costs of easy policy.

     The IMF's 2019 Article IV consultation for Japan said in November 2019 that

the BOJ could consider shifting its Japanese government bond target from the

10-year note to shorter maturity bonds so as to mitigate the impact of prolonged

easy policy on profits at financial institutions.

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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