NAGOYA – Bank of Japan Gov. Toshihiko Fukui on Wednesday reiterated the central bank’s commitment to its monetary easing policy, rejecting speculation that the policy may soon change.
“We will continue with our quantitative easing policy,” Fukui told a gathering at a Nagoya hotel.
Since March 2001, the BOJ has maintained a quantitative easing policy, targeting near-zero short-term interest rates and infusing the nation’s financial system with cash.
Fukui said the central bank will retain this policy until year-on-year changes in domestic prices rise above zero percent.
Regarding a recent surge in long-term interest rates, Fukui said the BOJ will carefully monitor the market.
“We will monitor financial market movements carefully to see whether long-term interest rates are not fluctuating in a volatile manner for reasons other than economic fundamentals,” he said.
Fukui cited subsiding pessimism over the economic outlook as one factor underlying the recent rise in long-term interest rates and stock prices.
“Although market expectations had been rather pessimistic, that is being adjusted,” he said. “It is not uncommon for markets to react to various factors and move in an irregular manner.”
Lobby calls for help
The head of the nation’s most powerful business lobby urged the Bank of Japan and the government Wednesday to take steps to lower rising long-term interest rates.
“I think adjustments should be made,” Hiroshi Okuda, chairman of the Japan Business Federation (Nippon Keidanren), told a news conference. “That means making efforts to bring them down.”
The price of the benchmark 10-year Japanese government bond issue fell sharply on Tuesday, at one point sending its yield to the highest level in over 2 1/2 years.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.