WASHINGTON, Oct 12 (Reuters) - Bank of Japan Governor Haruhiko Kuroda said the divergence in monetary policy among the world’s four largest central banks is justified as they reflect differences in their economic situations.
The Federal Reserve and the Bank of England are moving towards normalising their ultra-loose monetary policies, while the European Central Bank and the BOJ are continuing their massive stimulus.
“That does not create any problem,” Kuroda said.
“I think this non-synchronised way of monetary normalisation and monetary policy management is quite justified. A synchronised exit from unconventional policy by all central banks could be much more difficult for some emerging market economies,” he told the Emerging Markets magazine in a recent interview.
Kuroda was in Washington to attend the meeting of IMF and Group of 20 finance leaders.
Kuroda reiterated his view that while Japan’s economy was headed for a moderate recovery, the central bank would stick to its quantitative easing programme as the country was still only half-way in meeting its 2 percent inflation target.
He acknowledged that export volume has been “rather flat”, but said this was due in part to weak external demand particularly in East Asia, and that the yen’s weakening had helped the country’s overseas shipments.
“Yen depreciation so far has been broadly in line with fundamentals and financial conditions. And that will be beneficial to the economy,” he said in the interview. (Reporting by Leika Kihara, editing by David Evans)