- Negative rates will help stimulate the economy Kuroda
- Kuroda meets PM Abe discusses world markets
- Kuroda refused to comment on the exchange rate
Japanese Friday makers have said that they would seek a comprehensive policy response of G20 nations in the turbulence of the global market, as the governor of the central bank of the country rejected the suggestions of the rout was caused by the new negative interest rate policy of the bank .
Tokyo Stressing the alarm on the relentless fall in share prices, Prime Minister Shinzo Abe held talks with Kuroda for the first time in nearly five months to discuss economic developments and global market .
"I explained the thinking of the Bank of Japan on the quantitative and qualitative easing with negative interest rates and its effects," Kuroda told reporters after the meeting, adding that Abe n 'has no particular comment on monetary policy.
Kuroda declined to comment on recent yen movements and what he discussed with Abe on monetary policy.
Nikkei average from Japan fell by more than 5 pct to 16 new month low Friday, while the yen remained almost 15 months against the dollar as investors flocked to the safety of the Japanese currency on concerns about the health of European banks and the global economic outlook.
verbal threats of intervention by the Finance Minister Taro Aso has failed to hit the weaker yen. Yen strength has added to headaches for the Bank of Japan, the adoption of negative interest rates last month has so far failed to produce a positive impact on the stock market supported the midst of a broader market rout.
Aso and his subordinates the Ministry of Finance said they will look to see if the G20 finance leaders can agree on policy coordination when they meet in Shanghai later this month.
"There are many deep-seated problems behind recent market movements. Of course, we must consider how we can promote policy coordination heading into the G20 meeting," said the currency diplomat Masatsugu Asakawa reporters Friday.
Earlier, Kuroda said the negative BOJ rate policy will help stimulate the economy by lowering borrowing costs, dismissing criticism that the policy change has exacerbated the market crisis by stoking fears that it will tighten bank profits.
"I do not think the negative of BOJ rate policy is behind (the recent market turbulence)," said Kuroda parliament Friday.
"excessive risk aversion spreads among global investors, "he said, adding that it will carefully watch how recent market movements may affect the economy and prices in Japan.
he also reiterated that the BOJ would not hesitate to expand monetary stimulus further if necessary to achieve its goal of 2 percent inflation.
BOJ reduced the interest rate below zero reference last month stunning investors with another bold move to stimulate the economy as market volatility and slowing global growth threaten its efforts to overcome deflation.
Reuters
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