TOKYO: A Bank of Japan board member said on Wednesday the central bank would ease policy further without hesitation if momentum for hitting its 2 per cent inflation target was lost, adding that she was concerned about mounting risks from overseas economies.
“My recent concern is that, amid significant downside risks concerning overseas economies, negative effects would be exerted on prices,” Takako Masai said in a speech to business leaders in Tsu, Mie Prefecture, central Japan, posted on the BOJ’s website.
“I intend to continue to conduct monetary policy appropriately toward achieving the price stability target while considering all conceivable adverse and positive effects from every angle.” Masai also said that the BOJ conducts monetary policy as a package and that it was inappropriate to focus on a single measure, in reference to market expectations about a further deepening in negative interest rates if it were to ease again.
“(The BOJ) is carrying out policy as a package on the whole, so it’s not appropriate to single out a particular measure and discuss its pros and cons,” she told reporters after delivering the speech.
The BOJ left monetary policy steady at its July policy meeting but pledged to ease without hesitation to preempt risks that could hurt the chance of hitting its 2 per cent inflation target.
BOJ policymakers discussed the need for the central bank to take a preemptive response to downside risks to the economy and prices, minutes of its July 29-30 meeting showed.
At its subsequent policy review last week, the central bank stood pat but signalled the chance of expanding stimulus as early as its next policy meeting in October by issuing a stronger warning against overseas risks.
The BOJ judged that it needed to pay more attention to the possibility that the momentum toward hitting the 2 per cent inflation target would be lost.
That judgment led to its decision last week to add to its statement an expression that it would reexamine economic and price developments at its next meeting in October, Masai added. She did not elaborate further. — Reuters
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