10 Oct 2013
Bank of Japan governor says he will continue to agressively fight deflation
FXstreet.com (London) - Bank of Japan Governor Haruhiko Kuroda has spoken in the US today, saying that the Japanese central bank will do everything it can to fight Japanese deflation.
Speaking at the Council on Foreign Relations in New York, Kuroda defended the BoJ’s asset purchase programme, describing its effect as “encouraging”. He added that: “By continuing to pursue we are convinced that we will definitely overcome deflation.”
The Bank of Japan continues to target 2 percent inflation in two years and intends to double the monetary base by the end of 2014.
The comments were par for the course for the Bank of Japan. Whereas most of the G10 has pursued a policy of combining ultra-loose monetary policy with moderate fiscal contraction, Japan has continued with fiscal expansion as it tries to jump its domestic consumption to life.
In the short term, yen has been driven up thanks to haven flows on US debt ceiling uncertainty. While yen strength has been damaging to Japanese exporters, both in the short and longer term, Kuroda stated that Bank of Japan policy is aimed as spurring on domestic consumption rather than targeting the currency.
Speaking at the Council on Foreign Relations in New York, Kuroda defended the BoJ’s asset purchase programme, describing its effect as “encouraging”. He added that: “By continuing to pursue we are convinced that we will definitely overcome deflation.”
The Bank of Japan continues to target 2 percent inflation in two years and intends to double the monetary base by the end of 2014.
The comments were par for the course for the Bank of Japan. Whereas most of the G10 has pursued a policy of combining ultra-loose monetary policy with moderate fiscal contraction, Japan has continued with fiscal expansion as it tries to jump its domestic consumption to life.
In the short term, yen has been driven up thanks to haven flows on US debt ceiling uncertainty. While yen strength has been damaging to Japanese exporters, both in the short and longer term, Kuroda stated that Bank of Japan policy is aimed as spurring on domestic consumption rather than targeting the currency.