Tokyo, Japan (4E) – Japan’s incoming central bank governor Haruhiko Kuroda said on Monday that he promises to use all options to meet the government’s 2 per cent inflation target and also emphasized the need for a wider expansion in stimulus.
Kuroda, the outgoing head of the Asian Development Bank and the Japanese Prime Minister Shinzo Abe’s nominee as the next Bank of Japan (BoJ) governor, told lawmakers during his second Diet confirmation hearing that he will carefully consider such proposals.
He also added that opinions are mixed on how effective the asset purchasing program is. Even though he said that bond purchases are likely to remain as a key tool, he also wants to discuss monetary easing “soon”.
Kuroda said that deflation, which has been a drag on the Japanese economy for the last 15 years, will not be beaten with the current scale of asset purchases by the BoJ. He suggested that further monetary easing is needed, although he did not say whether he will add more stimulus at his first policy board meeting on April 3-4 as BoJ governor.
Two months ago, the BoJ set an inflation target of 2 per cent, but a survey of 15 economists by Bloomberg News indicates that the central bank would not meet that target within two years.
In the BoJ’s Policy Board meeting on March 7, Masaaki Shirakawa’s last as governor, the central bank kept the monetary policy unchanged. Shirakawa, together with his two deputies, will step down on March 19.
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