The Bank of Japan may consider setting preconditions for ending its policy of keeping interest rates near zero should the economy deteriorate and deflation take hold, BOJ Policy Board member Atsushi Mizuno said Thursday.
"It is an option to show our commitment to keep interest rates at extremely low levels should we judge that the economy and prices will get worse," Mizuno said in a speech in Okayama.
Japan's economy emerged from its deepest postwar recession last quarter, growing for the first time in more than a year as stimulus efforts at home and abroad helped exports and consumer spending rebound. Mizuno, 50, said it's "highly uncertain" the economy will continue to improve.
"Growth might have resumed but the economy is so depressed that its year-over-year decline remains severe," said Carl Weinberg, chief economist at High Frequency Economics in Valhalla, N.Y. "In other words, recession may be over, but depression persists."