MNI POLICY: BOJ Kuroda Vows To Do Whatever Bank Can Do

--BOJ Governor Tells Diet Further Easing If Needed

     TOKYO (MNI) - The Bank of Japan that the BOJ will do whatever it can to

both stabilize the financial markets and facilitate lending to the real economy,

Governor Haruhiko Kuroda told lawmakers Tuesday.

     "The BOJ, cooperating with the government, will do whatever the bank can

do," he told a Diet committee.

     Kuroda repeated that the BOJ wants to get a new lending facility to

facilitate smaller firms' financing underway before the next regular policy

meeting on June 15-16.

     "(Bank officials) continue examining the scheme (of the new lending

facility) and (the BOJ) will release details without taking time," Kuroda said.

     The BOJ board announced on April 27 that it would introduce the new lending

facility to support the government's step to facilitate smaller firms' financing

and the interest rate on loans will be zero percent.

     Kuroda also said that the BOJ will not hesitate to conduct additional

easing, while carefully watching developments of the coronavirus outbreak and

its impact on economic activity, although he didn't elaborate on what kinds of

measures the BOJ would take, saying that how and when the BOJ would act depend

on conditions at that time.

     --NOT MUNIS

     Kuroda said that the BOJ has no plan to buy municipal bonds to inject

liquidity into financial markets now as the BOJ has sufficient tools to inject

liquidity.

     He also repeated that the BOJ has been buying government bonds from the

viewpoint of monetary policy and the bank isn't monetizing government debt.

     The governor also told lawmakers that the BOJ will survey financial

institutions to examine how they have implemented loans to smaller firms and the

bank will release details of its study.

     Shinichi Uchida, the BOJ executive director in charge of monetary policy,

said that the outstanding balance of stocks held by the BOJ through purchases of

ETF (exchange-traded funds) is about 5-6% of the total stock balance.

     He also said that the balance of ETFs held by the BOJ at the end of March

on a book value basis totalled about JPY30 trillion. 

--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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