Bank of Japan (BOJ) Governor Haruhiko Kuroda attends a news conference at the BOJ headquarters in Tokyo, Japan, October 31, 2017. REUTERS/Toru Hanai
November 6, 2017
NAGOYA, Japan (Reuters) – Bank of Japan Governor Haruhiko Kuroda said on Monday the central bank was closely watching the potential damage a prolonged ultra-easy policy could have on financial institutions’ profits as it makes policy decisions.
“The BOJ is mindful of the risk that its low-interest rate policy, if prolonged, could weigh on financial institutions’ profits” and discourage them from boosting lending, Kuroda said in a speech to business leaders in Nagoya, central Japan.
For now, such a risk was not a serious one because financial institutions have a sufficient buffer against declining profits, Kuroda added.
Under a policy framework adopted last year, the BOJ now guides short-term interest rates at minus 0.1 percent and the 10-year government bond yield around zero percent.
(Reporting by Leika Kihara; Editing by Chang-Ran Kim)