TOKYO, March 21 (Reuters) - The Bank of Japan’s new governor, Haruhiko Kuroda, on Thursday declined to comment on whether he would call an emergency meeting to discuss easing monetary policy before a regular rate review scheduled for April 3-4.
Kuroda, Japan’s former currency tsar, and his two deputies, former academic Kikuo Iwata and career central banker Hiroshi Nakaso, assumed their posts on Wednesday.
Following are key quotes from their joint inaugural news conference. They are all quotes from Kuroda unless specified:
“The BOJ has held emergency meetings in the past, so it’s not impossible, but I shouldn’t comment on whether there will be an emergency meeting.”
”The BOJ must strive to achieve its 2 percent price stability target as soon as possible. Looking at other countries, many central banks see the time span for meeting their price stability target as two years so it would be desirable to meet the price target within two years.
“It’s true that inflation expectations (among the public) may be turning from negative, but that does not mean that the 2 percent target could be achieved without easing policy further. Without adopting further bold easing, the 2 percent target cannot be met.”
“As for means, the BOJ must expand monetary stimulus both in terms of volume of assets it buys and type of assets it targets. It’s true that quantitative easing is indispensable, but it (the BOJ) should not just aim for expanding base money.”
“I‘m ready to take all means available in easing monetary policy. It’s the mission of the BOJ to do its utmost to achieve the 2 percent price stability target.”
“I‘m ready to use all possible means in order to achieve the 2 percent price stability target as soon as possible, including front-loading (open-ended asset purchases). We’ll discuss with the policy board on specifically what steps should be taken.”
“Purchasing various assets including REITs is a matter that should be discussed at the policy board, based on market and economic trends.”
“Monetary policy is not aimed at foreign exchange rates. In addition, it is inappropriate to rely on currency moves to end deflation.”
“I consider the yen’s recent decline to be part of a correction of the excessive gains we saw after the crisis triggered by the collapse of Lehman Brothers.”
“It’s clear that the BOJ needs to ease monetary policy further. But it’s not just about increasing base money. It’s about lowering yields across the curve, and if necessary also lowering risk premiums on some assets. I want to thoroughly debate what steps to take with the other members of the monetary policy committee.”
“We are not in a situation where we have to worry about an asset bubble forming in Japan. In fact, there is no point in debating about asset bubbles when considering Japan’s monetary policy because this is something that is very unlikely to happen for the time being.”
(Quotes from Iwata)
“When it comes to questions about the relationship between money supply and prices, the point I want to make is that this relationship is a dynamic that takes place over a long-term horizon. It’s not a short-term phenomenon.”
“I feel it’s very important for the BOJ to commit to a specific time frame to achieve inflation and that it sticks by its commitment. We fell into deflation and expectations for more deflation has made it very hard to escape. That’s why we need to foster inflation expectations to end deflation.”
“Inflation targeting is not an end in itself. It’s a tool to foster employment and economic growth.”
(Quotes from Nakaso)
“When you look at the quality of people’s lives, it is important to stress that higher corporate earnings and rising wages should accompany inflation.”