Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

IMF, BOJ member say Japan needs to keep stimulus running

share with twitter share with LinkedIn share with facebook
share via e-mail
0
11/08/2017 | 03:15pm CEST
A man runs on a crosswalk at a business district in central Tokyo

TOKYO/MIYAZAKI, Japan (Reuters) - The IMF on Wednesday urged Japan to maintain its massive monetary stimulus to boost consumer prices, a view echoed by a central bank board member, reinforcing expectations policy will remain accommodative.

International Monetary Fund Managing Director Christine Lagarde said Bank of Japan Governor Haruhiko Kuroda was doing the right thing by committing to keep the money spigot wide open until inflation hit his 2 percent target.

"One of the strengths of central bankers is to be very clear in their communication and determined in their resolve, which clearly Governor Kuroda has demonstrated," Lagarde told Reuters on Wednesday.

The BOJ has faced mounting criticism that its huge asset purchases are distorting markets and pushing Tokyo stock prices - which hit a near 26-year high this week - beyond levels justified by economic fundamentals.

But with inflation distant from its target, the BOJ has said it is nowhere near dialling back the stimulus, even as its U.S. and European counterparts eye an exit from crisis-mode policies.

BOJ board member Yukitoshi Funo on Wednesday also defended the asset buys, saying he saw no need now to slow its purchases of exchange-traded funds (ETF) from the current pace of 6 trillion yen (40.35 billion pounds)per year.

"Stock prices aren't overheating," Funo told a briefing in Miyazaki, southern Japan, adding that it was "very favourable" that stock prices had risen so much.

ROOM FOR TWEAKS

Market players see a good chance Kuroda could be reappointed after his current five-year term ends in April, though he has been under growing calls for more transparency on how the BOJ could dial back stimulus.

A contender for the job who is a close aide to Prime Minister Shinzo Abe said the central bank needed a new leader to rebuild the regime.

"How do you evaluate the fact the core-core inflation rose a meagre 0.1 percent after (nearly) five years (under Kuroda) and how do you evaluate the governor who has done only so much?" Etsuro Honda, Japan's ambassador to Switzerland, told Reuters.

While Funo, a former auto executive, ruled out the chance of an immediate withdrawal of stimulus, he said the BOJ should be vigilant to the threats prolonged monetary easing posed.

"We're not assuming we won't make any changes to all of our various policy tools until 2 percent inflation is achieved," he said, leaving open the chance of tweaking some parts of the framework before others.

The comment reflects a growing view within the BOJ that its next move should be to roll back, not ramp up, its stimulus given the rising cost and diminishing returns of the programme, although there are varying opinions on how and when policy should be tweaked.

Lagarde said the diverging policy paths of major central banks had not led to massive and disruptive capital outflows in Asia, thanks to the cautious approach and clear communication by central bankers on their policy shifts.

"We believe these conditions can help to ensure that monetary policy changes do not provoke unnecessary capital flow movements," she said.

Under a policy framework adopted last year, the BOJ guides short-term interest rates at minus 0.1 percent and the 10-year government bond yield around zero percent. It also buys government bonds and riskier assets, including ETFs.

(Reporting by Leika Kihara in Tokyo and Sumio Ito in Miyazaki; Additional reporting by Stanley White, Chris Gallagher, Tetsushi Kajimoto and Takashi Umekawa; Editing by Sam Holmes and John Stonestreet)

By Leika Kihara and Sumio Ito

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Economy & Forex"
06:58aNIOC NATIONAL IRANIAN OIL : Iran will veto output grow when OPEC meets
PU
06:55aTrump ratchets up China trade conflict with fresh tariff threat
RE
06:55aChina says will 'fight back firmly' if U.S. publishes additional tariffs
RE
06:54aTrump ratchets up China trade conflict with fresh tariff threat
RE
06:45aTrade Fears Send Shiver Through Asian Markets
DJ
06:33aPCA PROPERTY COUNCIL OF AUSTRALIA : Economic diversification, urban amenity vital for Perth's high liveability status in post-commodity
PU
06:23aADF AUSTRALIAN DAIRY FARMERS : welcomes new Dairy Australia managing director
PU
06:16aNEWS HIGHLIGHTS : Top Financial Services News of the Day
DJ
06:11aIntel has paths around Trump's China tariffs, analysts say
RE
06:04aAUSTRALIAN WOOL INNOVATION : RAMping Up Repro workshop enables woolgrowers to best manage their rams pre-joining
PU
Latest news "Economy & Forex"
Advertisement