Kuroda drops hints at more options for easing policy
On Monday, BOJ Governor Haruhiko Kuroda told that more easing options can’t be ruled out to get to sustained 2% inflation, arguing that the obvious benefits outweighed the overall cost of such monetary policies.
Besides this, he added that a further dip in negative interest rates is still a common option for the major banks as it ensures an increase in asset purchases.
Even within the current framework, there’s enough room for further monetary easing in all three dimensions, including quality, quantity as well as the interest rate, while other new ideas shouldn’t be off the table, as Kuroda told.
He’s assured that when conducting its monetary policy, the BOJ should balance between benefits and costs.
The overall balance between costs and benefits can change depending on the situation, of course.
Monetary policy needs to be conducted in a flexible manner. There might be a situation where drastic measures are warranted even although they could raise costs, depending on the situation for economic activity, financial conditions and prices.