BOJ’s Kuroda explains new policy framework in Tokyo

In his opening remarks at the 3rd Bank of Canada (BOC) and Bank of Japan (BOJ) Joint Workshop held in Tokyo on Friday, BOJ Governor Kuroda spoke on the central bank’s new policy framework. The topic of the workshop was “Challenges to Central Bank politics for Price Stability and Financial Stability.”

Key Headlines:

Kuroda commented on the “importance of interaction between policy analysis and policy action”

Policymakers “recognize that even today central banks are being faced with a number of challenges in fulfilling their given mandates and central bankers are, admittedly, not omnipotent”

On new policy measures:

Kuroda noted, “[T]he first is the “yield curve control” in which the Bank will control short-term and long-term interest rates; and the second is an “inflation-overshooting commitment” in which the Bank commits itself to expanding the monetary policy base until [year-on-year CPI inflation] exceeds the price stability target of 2%…”