Highlights: BOJ Gov Shirakawa: always mull policy options

TOKYO (BestGrowthStock) – Bank of Japan Governor Masaaki Shirakawa said on Tuesday the central bank is always considering various policy options and will act in a timely and appropriate way when necessary.

“We will take the most appropriate action by examining the merits and drawbacks of various steps,” Shirakawa told a news conference.

Shirakawa also said the central bank will carefully watch the impact of the strong yen on Japan’s economy, but said it was wrong to decide if its policy actions were a success or not by short-term market moves alone.

The BOJ held off on loosening monetary policy earlier on Tuesday but said it will take timely action when necessary, setting the stage for possible easing next month if there is clearer evidence of the impact on the economy of a stronger yen.

Below are key quotes from Shirakawa’s news conference:

MONETARY POLICY

“When considering policy, we do not have preset views on specific steps or rule out any policy options.

“We will take the most appropriate action by examining the merits and drawbacks of various steps.

“The BOJ won’t respond to every move in currency rates and share prices, but we will guide monetary policy while taking into account our economic and price outlook over the coming few years. Other central banks are also attaching the utmost importance to this.

“The BOJ is watching market moves very carefully, as how the market moves could affect economic and price trends. It is important to convey our stance (to markets).

“As a result of such examinations, we will take action in a timely and appropriate manner if deemed necessary. We have made efforts on this front and will continue to exert efforts.”

FOREX

“Over the past month, demand for safe currencies has arisen as global investors fled risk due to heightened uncertainty about the global economic outlook. Against this backdrop, the Swiss franc and the yen have been bought …

“In any case, currency rates fluctuate on a daily basis due to various factors. It is not appropriate to determine if our policy actions were a success or not by short-term market moves alone …

“We are fully aware that export-related companies are considerably affected by the yen’s recent rise.

“But monetary authorities are unable to control currency rates freely … We are carefully watching how the yen’s rise impacts the Japanese economy.

“When companies make decisions on capital spending, they may be induced by the strong yen to hold off.”

(Reporting by Leika Kihara, Rie Ishiguro and Tetsushi Kajimoto; Editing by Michael Watson)

Highlights: BOJ Gov Shirakawa: always mull policy options