Kuroda: Rates may stay low for quite long time

Friday, 17. May 2019 08:57

Japan's economy has maintained momentum toward a return to the price stability target, meaning inflation is on track to rise to 2%, the head of the central bank said on Friday and stressed the government must enable long-term fiscal strength to help confidence. In the words of Haruhiko Kuroda, the said goal would calm movements in foreign exchange rates. When the Bank of Japan says rates would stay low for longer, it means quite a long time, he underscored.

The governor estimated the current setting may continue for more than a year. The global economic slowdown still hasn't impacted demand in the island country, he said and warned company expenditure is sensitive to external headwinds. However, BoJ doesn't expect overseas activity to deteriorate further, its chief revealed.

Growth in the United States should continue due to fiscal support while China's stimulus has already kicked in and the effect may strengthen, Kuroda stressed. He also said profitability hurdles in regional banks should be countered by streamlining but also suggested mergers and cooperation with other sectors.

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