BOJ’s Kuroda says aware easy policy could destabilize banking system

NAGOYA, Japan (Reuters) – Bank of Japan Governor Haruhiko Kuroda said on Monday the central bank was aware that prolonged ultra-loose monetary policy could squeeze financial institutions’ margins and potentially destabilize the country’s banking system.

Kuroda also said uncertainty surrounding overseas economies was heightening due to escalating Sino-U.S. trade friction and the rise of protectionism.

“The impact of such problems on Japan’s economy is limited for now,” Kuroda said in a speech to business leaders in Nagoya, central Japan. “But if the problems persist, the effect on Japan’s economy could become bigger.”

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