- The current Governor Kuroda was first appointed in March 2013 and has been leading the central bank’s ultra-accommodating monetary policy since 2016.
- Japan’s upper house of parliament approved candidate Kazuo Ueda as the next governor to head the central bank, succeeding Kuroda, Kyodo reported.
- “The Japanese economy, despite being impacted by factors such as high commodity prices, has strengthened as the resumption of economic activity has progressed,” the Bank of Japan said in its policy statement.
Haruhiko Kuroda, Governor of the Bank of Japan (BOJ), at the central bank headquarters in Tokyo, Japan, on Thursday, May 27, 2021.
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Japan’s outgoing central governor Haruhiko Kuroda defended the Bank of Japan’s ultra-accommodative monetary policy at his last policy meeting on Friday.
The Bank of Japan left its negative rate unchanged at -0.1%, broadly in line with expectations – and reiterated the central bank’s aim to keep the yield on the 10-year Japanese government bond (JGB) around 0%.
The central bank has left its benchmark rate unchanged since 2016, when it implemented its yield curve control (YCC) policy, which seeks to defend its target on JGBs by purchasing an unlimited number of government bonds.
Kuroda was first appointed in March 2013. His current five-year term expires on April 8 and will be replaced by new BOJ chief Kazuo Ueda. / wants to praise Ueda highly
Kuroda has guided the central bank’s ultra-loose monetary policy for the past decade — even as global central banks have been raising interest rates in recent months in an effort to curb inflation.
The BOJ shocked global markets in December when it widened its tolerance range to 50 basis points above and below its 0% target – up from 25 basis points previously.
On Friday, 10-year Japanese government bond yields fell to 0.441%, below the upper ceiling of the central bank’s tolerance margin of 50 basis points above and below 0%. The Japanese yen weakened about 0.3% after the announcement and traded at 136.6 against the US dollar.
“The Japanese economy, despite being impacted by factors such as high commodity prices, has strengthened as the resumption of economic activity has progressed,” the Bank of Japan said in its policy statement closing Friday’s two-day meeting.
Financial conditions have been generally accommodative, although the financial position of companies in some segments has remained weak.
Japan’s upper house of parliament approved Ueda as the next central bank governor, Kyodo reported. This clears the way for the Japanese government to formally appoint Ueda after approval by the lower house on Thursday.
The parliament also approved Shinichi Uchida and Ryozo Himino as the next deputy governors of the Bank of Japan, Kyodo said.
The central bank held off changes to its yield curve management policy and inflation target, saying it will aim “to meet the 2 percent price stability target for as long as it takes to maintain that target in a stable manner.”
The Bank of Japan “will continue to expand its monetary base until the year-on-year rate of increase in observed CPI (all items minus fresh food) exceeds 2 percent and remains stable above target,” it said in a statement. .
The Japanese consumer price index rose 4.2% in January, the highest CPI reading in 41 years. The next report will be published on February 24.
However, the central bank ended its statement on an optimistic note, saying that further growth is ahead for the country’s economy.
Japan’s economy is likely to recover as the impact of COVID-19 and supply-side constraints ease, although it is expected to be under downward pressure from high commodity prices and slowdowns in overseas economies. Bank.
“The Japanese economy is expected to continue to grow at a rate in excess of its potential growth rate,” the report said.