Additional comments are flowing in from the Bank of Japan (BOJ) Deputy Governor Masayoshi Amamiya, via Reuters, as he now talks about the central bank’s policy tools and a potential rate cut.
Now is time where it’s crucial to keep entire yield curve stably low.
Cutting short-, long-term rates is among crucial tools in easing policy further.
BOJ says clearly rates will move at current or lower levels, will cut rates as needed.
Lower rates could affect financial intermediation.
Uncertainty is high on outlook but economy expected to follow improving trend ahead.
It’s appropriate to ensure BOJ can take into account impact on financial intermediation when cutting rates.
By sharing BOJ’s views with markets, various economic entities, BOJ can heighten effectiveness of rate cuts as an easing option.
Output increasing on back of solid consumption of goods at home and overseas, favourably affecting capex.
BOJ’s ETF buying has had positive impact on markets when stock prices fell, volatility heightened.
Excluding one-off negative factors, prices are moving in a slightly positive territory.
BOJ hopes to analyse at March review effect of its ETF buying in various stages, think of ways to maximise effect by buying aggressively when necessary.
Prices likely to accelerate pace of rise as economy improves.
Risks to economy are skewed to downside.
Need to pay attention to developments of coronavirus.
BOJ’s response to coronavirus exerting intended effects.
Achieving our 2% inflation target is possible by ‘polishing’ BOJ’s policy framework, patiently sustaining monetary easing.
Won’t hesitate to ease policy further if necessary.
Japan economy no longer in deflation but will take time to achieve 2% inflation target.