The Bank of Japan is ready to loosen its credit grip further if necessary as it seeks to conquer nearly two decades of deflation, its chief Haruhiko Kuroda said Wednesday.
The central bank “will not hesitate to take additional easing measures in terms of three dimensions — quantity, quality and the interest rate — if it is judged necessary,” he said in a speech at Columbia University.
But Kuroda, who is visiting the United States to attend a series of international financial meetings to be held in Washington later this week, was hopeful that the BOJ’s negative interest rate policy introduced in February will produce intended results.
“Going forward, the effects of the negative interest rate policy are likely to steadily spread to the real economy and inflation,” he said.
Kuroda went on to say the BOJ’s large-scale easing policy, including a negative interest rate, “represents the most powerful monetary easing in modern central banking history.”
The central bank, he added, will continue with the easing stance to attain its inflation target of 2 percent as long as it is necessary.
