<--Awin verification 001--> BOJ chief Haruhiko Kuroda guidelines out climbing rates of interest for ‘fairly a very long time’ – Forex News Today

BOJ chief Haruhiko Kuroda guidelines out climbing rates of interest for ‘fairly a very long time’


The Bank of Japan will not raise interest rates “for quite a long time,” its chief said in an interview published Saturday even as its U.S. and European peers tighten monetary policy.

Gov. Haruhiko Kuroda dismissed speculation that the central bank is planning to adjust its superloose policy, aimed at keeping long-term interest rates around zero percent and short-term rates at minus 0.1 percent

“We don’t intend to raise them for quite a long time,” he told the Yomiuri Shimbun newspaper.

The BOJ has struggled for years to reach the 2.0 percent inflation target thought necessary to turbocharge the economy, and has defended its decision to maintain monetary easing even as other central banks tighten policy.

After its last policy meeting in July, the BOJ said it “intends to maintain the current extremely low levels of short- and long-term interest rates for an extended period of time.”

Kuroda said that “an extended period” — a phrase borrowed from the U.S. central bank — means “quite a long time.”

“We don’t specify the period, such as whether it is one year, three years or five years,” he was quoted as saying.

“It’s a commitment that we will maintain the current low levels (of rates) as long as uncertainty lingers.”

His remarks are in sharp contrast to the direction that the U.S. and European central banks are taking.

The U.S. Federal Reserve is expected to raise interest rates twice more by the end of the year and the European Central Bank is exiting massive monetary easing.

Kuroda argued that the continuation of the BOJ’s easing policy will “naturally” lead to 2.0 percent inflation even if later than earlier thought, the Yomiuri said.

The prospect that interest rates here will stay low for the foreseeable future should keep the yen low, but the currency has often rallied in recent times due to safe-haven buying in times of financial uncertainty.

Mostly recently the yen rose against other major currencies when the Turkish lira plunged due to Ankara’s frictions with Washington, rattling financial markets.


Source link

You might like

About the Author: FX News

Leave a Reply

Your email address will not be published. Required fields are marked *