Normalization not in sight 9 years after start of massive BOJ easing

Politics Economy

Tokyo, April 7 (Jiji Press)–As Monday marked nine years since the Bank of Japan began its unprecedented massive monetary easing, talk of a possible policy normalization remains off the table, although central banks Americans and Europeans are beginning to tighten their monetary policy to curb inflation.

Meanwhile, traditional worries about a strong yen among bureaucrats, politicians and businesspeople are now being replaced by fears of a “bad yen weakening,” which reflects Japanese interest rate spreads. and foreign and leads to higher prices for crude oil and other imported goods.

Under the ultra-easy policy, the BOJ provides ample liquidity primarily by purchasing massive amounts of outstanding Japanese government bonds from financial institutions through its money market operations.

At a March 18 press conference, BOJ Governor Haruhiko Kuroda ruled out the central bank raising interest rates to be in line with its counterparts in the United States and Europe. “There is no need to raise interest rates now, and I don’t think a widening interest rate differential will immediately cause the yen to weaken,” he said.

He also said that the weak yen continues to have a positive impact on the economy, despite rising prices in Japan.

[Copyright The Jiji Press, Ltd.]

Jiji Press Bank of Japan

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