BoJ Governor Haruhiko Kuroda said today that “at this moment, we didn’t see the need to further lower the entire yield curve”. The economy has been in a “extremely severe situation” with “considerable negative growth” in Q2. Nevertheless, “once the impact of COVID-19 on the economy has subsided, the economy starts to recover and comes back to a normal growth path, then of course our extraordinary measures may be gradually curtailed.”
But he also noted that “there are significant uncertainties over the outlook for the economy.” The coronavirus pandemic “continues on a global basis, and concern about a second wave of the virus has increased recently.”
He added that 2% inflation target is “unlikely to be met in the short run”. Also, “the BOJ’s expanded balance sheet would not be normalized until 2% inflation is achieved.”
