April 11, 2019 / 7:24 PM / 4 months ago

BOJ Kuroda keeps upbeat view on global growth, signals policy status quo

FILE PHOTO: Bank of Japan (BOJ) Governor Haruhiko Kuroda attends a news conference at the BOJ headquarters in Tokyo, Japan December 20, 2018. Mandatory credit Kyodo/via REUTERS

WASHINGTON (Reuters) - Bank of Japan Governor Haruhiko Kuroda said on Thursday the global economy will see “sufficiently high” growth next year, maintaining his optimism that his export-reliant economy will soon emerge from a soft patch as overseas headwinds dissipate.

But he warned that risks to the global outlook remained, such as the fate of U.S.-China trade talks and lingering uncertainty on the path of Britain’s exit from the European Union.

“Our baseline scenario is that the global economy will recover in the latter half of this year, and achieve sufficiently high growth next year,” Kuroda told reporters upon arrival for a meeting of G20 finance leaders.

Kuroda’s comments underscore a dominant market view that the BOJ will hold off on ramping up stimulus at this month’s rate review, despite increasing signs of weaknesses in factory output and exports.

The finance leaders of the Group of 20 major economies will gather for a two-day meeting ending on Friday, where they will scrutinise various risks that forced the International Monetary Fund to slash its global economic growth forecast.

Kuroda voiced hope the United States and China will soon reach a deal on trade, saying the fact they are continuing negotiations suggests the risk of a stand-off is receding.

“Protectionism benefits neither the United States nor China,” Kuroda said.

“Both countries, as well as each G20 economy, must make efforts to solve problems based on the understanding that free trade under World Trade Organization rules has brought enormous benefits to the global economy,” he said.

Reporting by Leika Kihara; Editing by Andrea Ricci

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