BOJ Shirakawa affirms easy policy pledge but warns of costs
TOKYO (Reuters) - Bank of Japan Governor Masaaki Shirakawa reaffirmed the bank's commitment to maintain powerful monetary easing on Friday, but he warned that preventing credit bubbles was also among key roles for central banks across the world.
"Long-term interest rates will spike and erode the effect of monetary easing ... if people perceive the BOJ as having shifted to a policy of recklessly buying government bonds, focusing narrow-mindedly on achieving 2 percent inflation," Shirakawa told a news conference.
The BOJ announced on Tuesday its most determined effort yet to end years of economic stagnation, saying it would switch to an open-ended commitment to buying assets next year and double its inflation target to 2 percent.
(Reporting by Leika Kihara; Editing by Shinichi Saoshiro)
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