Haruhiko Kuroda - Bank of Japan


Last quote by Haruhiko Kuroda

It is very important to explain in easy-to-understand terms how monetary policy could affect the BOJ's financial health. We will consider it as a future possibility. In theory, it is possible to combine the different elements of monetary policy in several ways. However, I'm not thinking about changing the policy mix right now. Such changes won't have any implications on the BOJ's future policy stance.feedback
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May 10 2017 Japan
Haruhiko Kuroda has been quoted 77 times. The one recent article where Haruhiko Kuroda has been quoted is Bank of Japan's Kuroda: Something major is changing in the Japanese labor market. Most recently, Haruhiko Kuroda was quoted as having said, “So all of this makes our contention more reasonable. In the sense that labor market tightness has been affecting, initially part time workers and irregular workers, but now regular workers in small and medium sized enterprises are experiencing higher pay increases. The Japanese corporate sector now enjoys historic high level of profit, better than ever. – even better than during the bubble period – they have huge profit, huge cash to spend. So Japanese corporate sector has been increasing capital investment, and now, somewhat belatedly, started to increase wages.”.
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Haruhiko Kuroda quotes

In Japan, trend inflation has been moving sideways. The momentum for inflation to accelerate to 2 percent remains in place but lacks strength. The BOJ will continue to promote powerful monetary easing under the yield curve control framework to achieve its price target at the earliest date possible. I don't think U.S. interest rate developments will immediately have a severe impact on emerging economies. But we need to watch developments carefully.feedback

Monetary policy steps affect the economy and prices through markets and financial institutions' activities, so it's important to explain in easy terms the thinking behind our decisions and how we see the economy and prices. We need to look at various price indicators as well as factors that determine underlying trend inflation, such as the output gap and medium- to long-term inflation expectations. We won't immediately change our yield target just because a particular price indicator reaches a certain level.feedback

But Japan's economy is recovering moderately. Price growth remains around zero but is likely to accelerate toward 2 percent, albeit gradually. I don't think we need to think about (deepening negative rates) now.feedback

I don't see the need to raise our yield target just because a central bank of another country raises rates ... Currency rates move on various factors, not just on interest rate differentials. As for Japan's economy and prices, downside risks still exceed upside risks. I don't think we can say that downside risks subsided significantly. If we need to expand stimulus, I won't rule out the chance of deepening negative interest rates.feedback

Our monetary policy is conducted solely for the purpose of pulling Japan's economy out of deflation and achieving our 2 percent inflation at the earliest date possible.feedback

It would be very problematic if protectionism spreads, but I don't think that will happen.feedback

Most countries, including the G7 and G20 major economies ... are strongly committed to promoting global trade, and so can help prevent protectionism from spreading.feedback

But exchange rate movement is very difficult to predict. You can not say anything definite because exchange rates are affected by so many factors, not just interest rates (and) economic growth.feedback

The U.S. economy is likely to accelerate growth this year and next year, and price inflation may somewhat rise. All of (these factors) may make interest rates rise and the dollar might also appreciate.feedback

The exchange should reflect the economic fundamentals and be stable. Because economic fundamentals move only slowly, so if the economic fundamentals move slowly then the exchange rate also moves slowly. Not gyrate like in the last couple of months.feedback

As far as his fiscal stimulus package is concerned, I think it is good because large-scale tax cuts coupled with significant investment in infrastructure would raise U.S. economic growth in coming years and that would also raise global economic growth in coming years.feedback

Although protectionist policy is not good for the world economy, not good for even the U.S. economy, on balance, I think fiscal stimulus would dominate U.S. economic growth and also could affect positively the world economy.feedback

On the other hand, the question of his somewhat protectionist trade policy could be a matter of concern.feedback

Overall, both the global and Japan's economies are moving in a positive and more desirable direction.feedback

The global economy seems to be finally entering a new phase, by putting the negative legacy of the global financial crisis behind it, although considerable uncertainties lie ahead.feedback

There is still a lot of uncertainties in global developments, with big elections in France and Germany coming up in 2017.feedback

Thus, financial authorities are facing new challenges in terms of obtaining information and maintaining financial stability.feedback

We don't have to sacrifice consumer confidence and security because if they go down...it would hamper the long-term development of fintech.feedback

We're likely to see such effects of the so-called policy mix going forward.feedback

There may be some modification to our forecast that inflation will hit our 2 percent target during fiscal 2017.feedback

We don't think it's desirable for the yield curve to flatten. It won't be surprising to see super-long bond yields to rise a bit more. If asked whether we would try to push down super-long yields if they rise more, the answer is no.feedback

There's absolutely no chance now of reducing the balance of our government bond holdings.feedback

If 10-year government bond yields fall well below our target of around zero percent, we may slow our bond purchases. But we don't see an immediate possibility of our bond buying falling sharply from the current pace.feedback

It's not a serious problem, but a problem from time to time as it could result in excessive (yen) appreciation and disrupt markets.feedback

But if there is a big shock and we need to further strengthen our monetary accommodation, we'll do more.feedback

This kind of synergy, or what you can call a policy mix, could be quite useful.feedback

Even if the amount of our asset purchases declines or increases, that doesn't matter as long as we continue to control the yield curve as appropriate.feedback

I don't think there was a strong feeling shared among (G20 nations) that monetary policy was reaching its limits or that an over-reliance on monetary policy was causing big problems.feedback

In guiding monetary policy, we will take into account not just how our policies affect lending rates and the economy, but how they affect the finance sector.feedback

There is no better opportunity than now to completely get out of deflation. Talking about the limits of monetary policy does not help at all.feedback

There is no limit to monetary policy. In designing monetary policy, the BOJ will relentlessly pursue innovation and never hesitate to challenge.feedback

In order to achieve the 2 percent inflation rate as soon as possible, we have decided to implement a new framework for the current quantitative and qualitative easing (QQE). The new framework, which centers around a yield curve control, will be more flexible to prices and financial conditions compared to the original methods of controlling the growth of monetary base and outstanding government bonds.feedback

I don't think the BoJ has become cornered. We've changed the policy target. But we haven't abandoned our previous policies. We've simply strengthened them.feedback

There was no special instruction from the premier. We exchanged various views based on recent developments including Asian economies.feedback

For Japan in particular, the impact of the negative interest rate policy on the profits of financial institutions tends to be relatively large, due to such factors as the amount outstanding of deposits far exceeding that of lending, and to the spreads between deposits and lending rates already being extremely small following prolonged competition among financial institutions.feedback

The central bank should always prepare policy options to address such situations.feedback

That said, we should not hesitate to go ahead with (additional easing) as long as it is necessary for Japan's economy as a whole.feedback

The Bank of Japan will continue to carefully examine risks and take additional easing measures without hesitation. It could be that long-term inflation expectations are yet to be anchored in Japan.feedback

Technically there definitely is room for a further cut.feedback

At the moment, U.S. markets are attracting global funds. Globally there remain risks, such as European financial institutions or the Chinese yuan. We have to see if investors are ready to diversify to other markets than the U.S. in coming weeks.feedback

I expect there to be a frank exchange of views on how to achieve price stability and growth using monetary, fiscal and structural policies reflecting each country's needs.feedback

We're now scrutinizing how the effects of our policy steps spread to the economy. That doesn't mean we won't do anything until the effects are clear. If market moves, be it currency rates or something else, threaten achievement of our price target, we won't hesitate taking additional monetary easing steps.feedback

The central bank will act "decisively" to achieve its 2 percent inflation target.feedback

The BOJ won't hesitate to take further easing steps if necessary.feedback

There's a sense of anxiety spreading in the public about the fact the BOJ is implementing these abnormal policies.feedback

Having said that, I don't think there are limits to monetary policy.feedback

I know such a programme is adopted by the ECB (European Central Bank) ... At this stage, we don't have any plans to consider this option. This wasn't discussed at today's meeting.feedback

There's absolutely no change to our stance of aiming to achieve 2 percent inflation at the earliest date possible, and to do whatever it takes to achieve this. If needed, we can deepen negative rates much more.feedback

If there is any risk of declining inflation expectations affecting achievement of our price target ... we won't hesitate to further ease monetary conditions.feedback

For now, we would like to scrutinize how the policy effect of our 0.1 percent negative rate policy filters through the economy.feedback

We have absolutely no plans to push rates further into negative territory at a pre-scheduled timing. Like the European Central Bank, the BOJ's policy is aimed at achieving price stability. it was desirable for currencies to move stably, reflecting fundamentals.feedback

I'm convinced that such rises in bank lending would have a positive effect on Japan's economy.feedback

I want to carefully watch how recent market volatility would affect Japan's economy and prices.feedback

In terms of interest rates, the Bank of Japan has decided to implement a negative rate of minus 0.1%. Going forward, if it becomes necessary, we would look at making that even lower, if necessary.feedback

We think there is an increasing risk that an improvement in the business confidence of Japanese firms and the conversion of deflationary mindset may be delayed, and that the underlying trend in prices might be negatively affected.feedback

What's important is to show people that the BOJ is strongly committed to achieving 2 percent inflation and that it will do whatever it takes to achieve it.feedback

More than two years have passed since the BOJ introduced quantitative and qualitative easing (QQE). At the outset, many people were sceptical about the prospect of Japan's economy overcoming deflation.feedback

Some people may still be sceptical. But…economic and price trends have clearly changed under QQE. This is an indisputable fact.feedback

We can still ease our monetary policy substantially if we consider it necessary.feedback

We have to have a little patience. We will monitor everything closely. But again, the positive inflation trend is absolutely intact.feedback

The quantitative easing, the qualitative easing, the negative interest rate – these are the three dimensions where we can act.feedback

The timing for achieving the two percent price target (for inflation) has been delayed from the first half of 2016 to the second half, but this is largely due to the effect of falling energy prices.feedback

We plan to publicise the outcome of our investigations.feedback

If Japan is making steady progress toward achieving 2.0 percent inflation, there's no need to take additional steps.feedback

I can say that we are at the moment of truth, the critical moment, in our process of shaking free from deflation.feedback

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