Bank of Japan Governor: Need to Address Both Energy Price Surge and Economic Risks, Policy-making at Present Very Challenging

BlockBeats News, April 17th — Bank of Japan Governor Kuroda Haruhiko, following Thursday's participation in the Group of Twenty (G20) finance ministers and central bank governors meeting in Washington, told reporters: "The current situation involves a significant impact from the surge in energy prices. This has brought about not only the risk of upward pressure on prices but also the risk of economic downturn."

Bank of Japan Governor Kuroda Haruhiko emphasized the challenges faced by policymakers, who need to address both the upward pressure on prices and the economic downturn triggered by the Middle East conflict. He did not give a clear signal on the interest rate issue before the policy decision announcement this month.

Kuroda stated: "That is why it is very difficult for policy to respond. It is not easy to give a broad answer." This may be his last opportunity to signal to the market before the interest rate decision on April 28th. In addition to deciding on the benchmark interest rate, the meeting next week will also release the latest economic forecasts, which are expected to raise the inflation outlook while the growth forecast may be lowered.

"Overall, considering the possible duration of the impact and other economic conditions, we will ultimately choose the most appropriate measures to continue to achieve the 2% inflation target," Kuroda told reporters. "However, if I may add one point, in the case of Japan, even when looking to the medium term, real interest rates remain very low," Kuroda said. "In this sense, the financial environment is highly accommodative. While considering this, we hope to continue making various decisions."