By Leika Kihara
TOKYO (Reuters) – Bank of Japan Governor Haruhiko Kuroda said the central bank would “of course” consider easing monetary policy further if the economy lost momentum toward achieving its 2 percent inflation target, the Asahi newspaper reported on Friday.
The BOJ has various options available to ease, including cutting interest rates and accelerating government bond purchases, and could combine them if needed, Kuroda was quoted as saying in the interview with the paper conducted on Thursday.
“The BOJ will adopt policy that is most appropriate in light of economic and financial developments, and has the least side-effects,” Kuroda said, when asked how the central bank could act if it were to ramp up stimulus.
Kuroda said the BOJ must be mindful of the risk that prolonged easing could strain financial institutions, particularly regional banks already seeing their profits hurt by a dwindling population.
But he said it was inappropriate to modify the BOJ’s current policy framework before 2 percent inflation is met, according to the Asahi.
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