BoJ Chief Says Global Economy Entering New Phase

(RTTNews) - In the long-term perspective, the global economy seems to be finally entering a new phase, by putting the negative legacy of the global financial crisis behind it, Bank of Japan Governor Haruhiko Kuroda said Monday.

Nonetheless, considerable uncertainties lie ahead, he said in a speech in Tokyo.

As the global economy is entering a new phase, Japan's economy is now able to move further forward, supported by the tailwind, Kuroda noted.

The bank intends to keep the yield on 10-year Japan government bonds at around zero percent.

"By implementing this policy framework in an appropriate manner, the Bank can take advantage of the recovery momentum of the global economy to produce an even greater driving force for Japan's economy," Kuroda said.

At the November monetary board meeting, with a 7-2 majority, the bank kept its target of raising the amount of outstanding Japan government bond holdings at an annual pace of about JPY 80 trillion. Also, the board decided to maintain the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.

The minutes of the meeting held on October 31 and November 1 showed that one member observed that it was uncertain whether the amount of JGB purchases would decrease going forward under yield curve control. The member argued that the BoJ should set the amount of the JGB purchases as the operating target.

A different member said that the Bank should make public the policy reaction function for long-term interest rate control and develop a common understanding through communication with the market and various economic entities.