September 29, 2011 / 7:10 AM / in 8 years

BOJ Shirakawa: Japan banking stable despite euro woes

TOKYO, Sept 29 (Reuters) - Bank of Japan Governor Masaaki Shirakawa said on Thursday the country’s banking system remains stable as a whole despite instability in global financial markets, which reflects Europe’s fiscal problems.

“Japan’s economy is picking up steadily but is still in the midst of recovering from the slump after the (March 11) earthquake,” Shirakawa said in a speech to a meeting of credit unions.

The BOJ eased monetary policy in August in the wake of sharp rises in the yen, and has argued that with that move it has forestalled various risks to the economy such as slowing overseas demand and damage to exports from yen strength.

The central bank may debate additional monetary easing steps at its rate review next week if Europe’s debt woes trigger a renewed spike in the yen and sharp stock price falls, hurting business sentiment further. Otherwise, it prefers to stand pat for now to save its limited policy ammunition in case economic conditions deteriorate further. (Reporting by Leika Kihara; Editing by Edmund Klamann)

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