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MNI (London)
     TOKYO (MNI) - Bank of Japan Governor Haruhiko Kuroda said Tuesday that the
BOJ will consider conducting additional easy policy if hitting the 2% price
target is undermined by a slowing economy and inflation triggered by exchange
rate moves.
     Kuroda told lawmakers, "A central bank's monetary policy isn't directly
linked to foreign exchange rates, but central banks are closely watching the
impact of foreign exchange rate movements on economic activity and prices."
     He added that if the yen rose due to a narrowing interest rate gap between
the U.S. and Japan because the U.S. Federal Reserve cut rates, it will affect
Japan's wider economy.
     "The BOJ will consider conducting additional easy policy," if the
achievement of the 2% price is undermined due to developments of foreign
exchange rate, Kuroda said.
     As for possible measures, Kuroda pointed out four tools, including lowering
the short- and long-term interest rates, expanding the asset purchases and
accelerating injections into the monetary base.
     But he also said, "We will carefully examine the pros and cons" of
additional easing and the BOJ will carefully decide on its tool in a balanced
manner, taking all benefits and costs into consideration.
--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
[TOPICS: MAJDS$,MMJBJ$,M$A$$$,M$J$$$]
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com