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On the 24th, the Governor of the Bank of Japan, Tohiko Kuroda, reiterated his intention to take additional measures of monetary easing without hesitation if the effects of the new coronavirus infection become more prolonged and serious.
However, he explained that the influence of the new Crown “is a source of problems because it is not clear how it will converge.” Respond to the Finance and Finance Committee of the House of Representatives.
He said large-scale fiscal mobilization in each country in response to the drastic economic recession brought on by the new crown was “appropriate and necessary,” and said it would not undermine confidence in finances. Was.
He said that government bonds denominated in their own currency will not default, but if confidence in government bonds is lost, “interest rates will go up in the market.” He said that the current policy of monetary easing supports the economy through the low stability of medium to long-term interest rates and that “ensuring confidence in government bonds in the medium to long term is important for the effectiveness of the policy. monetary “.
Photographer: Karina Nooka / The Nikkei / Bloomberg
Although the realization of 2% of prices is not expected, he said that “he has no plans to review the current framework of quantitative and qualitative monetary easing with manipulation of long and short-term interest rates”, while “it is discussed in an appropriate time in the future. ” It’s possible. “While he prematurely repeated the easing policy exit discussion, he said:” Of course, we will discuss the exit strategy and policy at the financial policy decision meeting and disseminate the information appropriately “when we approach the target price. .
Regarding the additional system of accrual of interest for local banks and credit unions, which is subject to the strengthening of the managerial base as well as the managerial integration that was decided to implement this month, the regional financial institutions “support the strengthening of the base management, not the merger / integration purpose. That is. “It is a policy of prudence to ensure the stability of the financial system and” does not affect the current financial policy framework, “he said.
Semi-annual report
Governor Kuroda explained the outline of the semi-annual “Report on Monetary and Financial Adjustment” which said: “We will continue to implement the current easing measures firmly to support the financing of companies and maintain the stability of the financial market. I will do my best.”
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(Updated adding Governor Kuroda’s answer)
