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Kuroda committed to achieving 2% inflation target
The Bank of Japan Governor, Kuroda said that the central bank has ample room for additional easing and that it would take appropriate steps “without hesitation” in order to achieve the bank’s 2% inflation target.
Kuroda’s speech at the Jackson Hole symposium was released on Sunday, where he said, “QQE (Quantitative and Qualitative Monetary Easing) with a negative interest rate is an extremely powerful policy scheme, and there is no doubt that ample space for additional easing in each of these three dimensions (quantity, quality, and the interest rate) is available to the BOJ”
On negative interest rates, Kuroda signaled that rates were not at the lower bound. He said, “It is natural to assume that another lower bound exists, depending on the cost of holding cash currency, although the current level of the negative interest rate, at 10 bps, is still far from such a lower bound.”
Kuroda also stressed on carefully examining risks to the economic activity and prices at each of its policy meetings. He, however, did not elaborate how or when the BoJ would consider further stimulus. The Bank of Japan’s next monetary policy meeting is scheduled for September 20, where it is also expected to conclude a comprehensive analysis of its policies so far.
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