The Governor of the Japanese Central Bank Haruhiko Kuroda gave a clear signal that the institution will not tighter monetary policy next year. The reason for the comment was a statement by Kuroda at the University of Zurich last month when he mentioned the negative interest rates and other arguments in support of monetary policy.
The central bank’s program, which aims to stimulate the economy and influence the quantitative easing of Japanese banks, is successful and does not pose problems for financial institutions.
Meanwhile, the governor of Japanese Central Bank has urged financial institutions to reform their business structures to make effective use of financial technology. In his view, this will lead to major changes in world financial markets and will contribute to raising the growth potential and addressing social challenges not only in emerging but also in developed countries.
Bank of Japan must pursue the extremely ambitious monetary policy, as inflation remains well below the target of 2%. The Club clearly stated that it would act immediately if necessary to take additional measures for monetary facilitation.
In parliament last week, Kuroda was determined that Japanese banks had sufficient capital and their lending functions remained intact.
Some investors and economists have said that Kurada’s comments are meant to signal a step towards normalizing politics.
Morgan Stanley and JPMorgan Chase are among those who predict the tightening of monetary policy next year, as the Japanese economy registered its longest economic expansion in 16 years. Japanese core inflation, which excludes fresh food and fuel prices, rose by 0.8% in October, a government report said last week.
Earlier on Monday, the Japanese benchmark Nikkei 225 saw a decline of 111.887 points, or 0.49%, to 22,707.16 points, while the smaller Topix – by 9.66 points, or 0.54%, to 1,786.87 points.