Kuroda: Economies to Start Recovery in H2

Economic activity and financial stability in Japan are facing the risk of significant constraints in case preventive measures against the COVID-19 pandemic are fully re-imposed, Bank of Japan Governor Haruhiko Kuroda has warned.

However, Japan is not going into deflation with the Bank of Japan maintaining its 2% inflation target, said Kuroda, as quoted by Reuters.

Despite the uncertainties, Kuroda said that the Japanese and global economies are expected to gradually improve, starting from the second half (H2) of 2020.

“We’re not in deflation, in the sense of sustained periods of price declines. It certainly took more time than we hoped for, but I’m sure we will achieve the target.”

“Given the impact of COVID-19, the BOJ has purchased government bonds to maintain stability in the bond market and keep the entire yield curve at low levels.”

“I don’t think this kind of policy mix or coordination would make the central bank less independent.”