Asia Development bank boss supports further BOJ easing measures
Bloomberg in Tokyo
Asian Development Bank president Haruhiko Kuroda, a potential candidate to head Japan's central bank, signalled that he favours greater monetary stimulus by the Bank of Japan this year.
"Some additional" measures could be justified for 2013, Kuroda said, stressing that he was speaking in his capacity as an economist and chief of the ADB, not as a BOJ contender.
Kuroda said that the Bank of Japan had "many" tools to achieve its 2 per cent inflation target, and that the "global standard" for the horizon to achieve such goals is two years.
Kuroda's remarks indicate the BOJ would embrace more aggressive steps to end deflation should Prime Minister Shinzo Abe nominate him to succeed Masaaki Shirakawa and should he win confirmation in Parliament.
The BOJ last month announced it would start open-ended asset purchases only in January next year, even as it unveiled a 2 per cent inflation target that its own forecasts showed won't be reached in the coming two years.
Japan's economy has suffered under a decade and a half of deflation, which has pushed up the real burden of debt and caused companies and households to put off spending, Kuroda, a former deputy finance minister for international affairs, said yesterdat. Falling consumer prices must be "eradicated", he said.
Economists at banks including JPMorgan Chase and Credit Suisse see Kuroda as the leading contender to replace Shirakawa next month.
The yen has weakened and stocks have climbed since mid-November in anticipation of additional monetary stimulus by the incoming BOJ leadership team. The yen has fallen about 14 per cent in the past three months against the dollar, to 92.67 yesterday.
The Nikkei 225 Stock Average has climbed about 26 per cent over the same period.
Kuroda said that the yen "so far" had been in a "natural adjustment" from an excessive value. He also said that the yen's depreciation hadn't come too late to help his nation's economy, which has seen manufacturers including Sharp and Sony hurt by a surging yen in recent years.
Toyota Motor's share price has risen more than 50 per cent in the past three months, and the carmaker last week raised its profit forecast for the year ending in March to a five-year high.