MNI POLICY: New BOJ Facility Won’t Affect Policy: Kuroda

Bank of Japan Governor Haruhiko Kuroda said on Wednesday that the recently introduced Special Deposit Facility will not affect yield curve control and change monetary policy.

"The new facility is prudence policy, not monetary policy, and it will not affect the yield curve control policy and will not cause a change in monetary policy," Kuroda told lawmakers.

The BOJ board has decided to pay an additional interest of 0.1% on the current accounts of regional banks that the BOJ holds when these banks lift profitability or improve operations through consolidation.

When asked about the BOJ's purchases of exchange-traded funds, Kuroda said that the purchases need to continue for the time being in a flexible manner.

"If risk premium rises, it will destabilize financial markets and worsen confidence. (The BOJ) needs to prevent confidence from worsening," Kuroda said.

He also said it is premature to discuss an exit of easy policy, although bank officials are internally considering various issues.