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TOKYO (MNI) - Bank of Japan (BOJ) board member Yukitoshi Funo said
Wednesday that the board's decision of allowing the 10-year interest rate to
move widely in July doesn't mean that the BOJ will raise interest rates.
In a speech to business leaders in Kochi City, southern Japan, Funo said
that "if (the BOJ) maintained the powerful easy policy, it would affect business
conditions at financial institutions through a drop of margin from loans, which
in turn will create the risk of a pullback in financial intermediation."
"We continue to pay attention to the risks considered most relevant to the
conduct of monetary policy," Funo continued while indicating that the BOJ
doesn't need to adjust policy to mitigate the side effects of a prolonged easy
Other key points from Funo's speech:
-The BOJ will conduct monetary policy in an appropriate manner to achieve
the 2% price stability target, taking into account developments in economic
activity and prices as well as financial conditions.
-Funo maintains an optimistic outlook by saying Japan's economy is expected
to expand moderately.
--BOJ must pay attention to high uncertainties over trade policies'
development and impact on the global economy, even as global economy continue
to grow firmly on the whole.
--Japan's prices remain weak compared with a moderate economic expansion
and the tightness in the labor market.
--Expects Japan's inflation rate to move toward the 2% price target but
warned the risks that corporate price-setting remains cautious.
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