TOKYO -- The Bank of Japan Gov. Haruhiko Kuroda on Thursday acknowledged the extreme instability roiling stock and currency markets, citing the need for international cooperation to restore claim.
Kuroda spoke at a meeting of the financial affairs committee of the upper house of the parliament. With the Chinese economy slowing and credit concern looming over European banks, investors worldwide have grown "excessively risk averse," he said. The central bank will assess the repercussions for the Japanese economy and prices, rolling out policy responses if needed, he added.
The BOJ submits its monetary policy reports twice a year to the Diet, with the governor and other top officials briefing lawmakers. The latest meeting was the first such occasion after a negative interest policy was decided on in January. Nine upper house members grilled the officials for over two hours.
Kuroda dismissed the assertion that the BOJ's negative interest policy has triggered the turbulence. He said the benefits of the policy are beginning to emerge, citing a drop in mortgage rates. The central bank chief also expressed confidence that the impact will reach the real economy and prices via capital spending and housing investment.
Kuroda repeatedly stressed that the central bank will carefully watch the market. The instability in financial and capital markets and its impact will be discussed at the Group of 20 meeting of finance ministers and central bank chiefs to be held Feb. 26-27 in China, he said.