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Bank of Japan says it’s ready to ease monetary policy, but economy recovering

Governor of the Bank of Japan Haruhiko Kuroda speaks to journalists during the G20 finance ministers meeting in the Saudi capital Riyadh, on February 22, 2020. (AFP)
Governor of the Bank of Japan Haruhiko Kuroda speaks to journalists during the G20 finance ministers meeting in the Saudi capital Riyadh, on February 22, 2020. (AFP)
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22 Feb 2020 05:02:20 GMT9
22 Feb 2020 05:02:20 GMT9

RIYADH: The Bank of Japan is ready to ease monetary policy without hesitation, but there is no change in the central bank's view that the Japanese economy is recovering moderately, its governor, Haruhiko Kuroda, said on Saturday.

Japan's economy is unlikely to slump sharply despite uncertainty over the impact of the coronavirus outbreak, Kuroda said on the sidelines of a conference in Riyadh.

Finance leaders of the world's 20 largest economies have gathered in Riyadh this weekend to discuss economic policies and the impact of the virus on global economic growth.

Japan ranks second in the world after China for the number of confirmed virus cases because of an outbreak on a cruise ship.

Kuroda said on Saturday the yen's recent declines were largely driven by a strong dollar, shrugging off some market views that the widening coronavirus epidemic is triggering an outflow of funds from Asia.

Kuroda also said he had not changed his view that Japan's economy would continue to recover moderately, suggesting that he saw no immediate need for the BOJ to expand stimulus.

"If needed, we will take additional monetary easing steps without hesitation," he told reporters upon arriving at a Group of 20 finance leaders' gathering in Riyadh.

"But the situation is still uncertain. I don't think Japan's moderate economic recovery is derailing."

The yen bounced back on Friday after suffering its worst two-day performance since 2017 on worries about the health of Japan's economy, which has been hit by supply-chain disruptions and a plunge in Chinese tourists caused by the virus outbreak.

Kuroda said the Japanese economy was unlikely to enter a severe downturn as capital expenditure remained firm, adding that he saw no changes to the fundamentals driving exchange-rate moves.

"When you look at recent developments, the dollar is strengthening against the yen and the euro," Kuroda said.

"Various currencies, including those in Asia, are weakening against the dollar," he said, dismissing the view that the yen could be losing its status as a safe-haven currency. 

Reuters

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