EXTRACTS-Comments from BOJ Governor Kuroda at press conference


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March 19 (Reuters) – On Friday, the Bank of Japan widened the band in which it allows long-term interest rates to hover around its target, as part of a series of measures to make its policy ultra-easy. more sustainable in the middle of a prolonged battle. to trigger inflation.

Following are excerpts from BOJ Governor Haruhiko Kuroda’s comments at his post-meeting press conference, which was held in Japanese, as translated by Reuters:

PERFORMANCE BAND

“I’m not thinking of widening the band for long-term returns … We allowed long-term rates to go up and down 0.25% around our target to improve market functions. But we will make sure that any movement do not diminish the impact that our policy of controlling the yield curve has on the stimulation of the economy. “

“If you ask me if the BOJ could reduce its bond buying in market trading to prevent yields from falling too low, I will say no, we don’t have such a plan.”

“We will not tolerate fluctuations in performance that would impact our monetary easing … Our new market trading tool will be a powerful weapon for this purpose. It is absolutely necessary to ensure that the effect of our monetary easing is not affected. We clarified that position with our new guide. “

“I don’t think Lieutenant Governor Amamiya and I have made conflicting comments … I see today’s decision clarifies our stance on how much we tolerate fluctuations in performance.”

LONG TERM RATES

“If limited to a certain range, long-term interest rates can fluctuate without diminishing the impact of monetary relaxation and help improve market functions. This is what we found in our review.”

“Our clarification on how much we allow 10-year yields to fluctuate has no special bearing on our position that excessive drops in super long yields are undesirable.”

“At present, we do not have any plans to take action to intentionally boost long-term interest rates or steep the yield curve.”

BUY ETF

“I don’t think our ETF purchase has crippled the Japanese stock market.”

“When we increased buying last March, it had a huge positive effect. So we decided to keep the 12 trillion yen ceiling and buy ETFs more flexibly and agilely. Removing all numerical targets will not necessarily allow for flexible buying. having a high enough ceiling shows that we are ready to buy in bulk and bold. “

INCENTIVES TO FINANCIAL INSTITUTIONS

“If we cut rates and deepen negative rates, that could have an impact on the profits of financial institutions. To prevent this from hurting loans, we decided to offer incentives (to financial institutions) with a new scheme. This one is aimed at incentivize financial institutions to boost loans. “

NEGATIVE RATES

“Some people say that the BOJ cannot increase negative rates because of side effects. That is not true. I don’t think it is impossible to deepen negative rates.”

CURRENCY MOVEMENTS

“Exchange rate movements affect the economy and prices. It is desirable that exchange rates move in a way that reflects economic fundamentals. I don’t think recent movements deviate from fundamentals.”

INFLATION TARGET

“We will maintain our inflation target of 2% and continue our powerful easing patiently to achieve it at the earliest date possible. Our steps announced today will make our monetary easing framework more effective and sustainable.” (Reporting by Leika Kihara; Editing by Devika Syamnath)

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