* Kuroda: limited room to lower rates further
* Kuroda: BOJ's asset purchases not sufficient
* Govt nominating new BOJ governor in monetary policy shift
By Stanley White and Tetsushi Kajimoto
TOKYO, March 11 Haruhiko Kuroda, the
government's nominee to head the Bank of Japan, said the central
bank should focus on influencing market expectations because
there is "limited room" to lower interest rates further.
Kuroda said the BOJ had not been buying enough assets to
meet its 2 percent inflation target and that if appointed he
would do whatever it takes to achieve this goal.
"We're in an environment where there is limited room to
lower interest rates further," Kuroda said in a confirmation
hearing at the upper house of parliament on Monday. "That's why
it is important to try to influence market expectations."
Last month Prime Minister Shinzo Abe nominated Kuroda, who
shares his views on aggressive monetary tactics, to lead a BOJ
drive to end nearly two decades of deflation.
Kuroda is expected to be approved by parliament because
opposition parties, whose support is needed in the upper house,
have indicated they would back him.
He said last week that the BOJ should consider frontloading
its open-ended asset purchases planned from next year, with an
eye on huge purchases of longer-dated government
At a policy review last week, the BOJ held rates steady, and
said in its assessment the economy had stopped worsening.
Investors expect the central bank will become more
aggressive once Kuroda takes over as governor after incumbent
Masaaki Shirakawa and his two deputies step down next week.
Abe's policy prescriptions of monetary and fiscal stimulus,
dubbed Abenomics, have so far helped drive the yen to 3-1/2 year
lows against the dollar, supporting the export engine.
Abe has also nominated academic Kikuo Iwata, who supports
unconventional monetary policy, and BOJ official Hiroshi Nakaso
as the two deputy governors.
The nominations must be approved by both houses of
parliament. Abe's ruling camp controls the lower house but lacks
a majority in the upper house.
The BOJ has agreed to buy assets or make loans totalling 101
trillion yen ($1.07 trillion) by the end of this year, part of
which includes buying government bonds with a maturity of up to
Under relentless pressure from Abe, the BOJ said in January
it would switch to open-ended asset buying from 2014 to achieve
the 2 percent inflation target.