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Japanese central banker claims omnipotence for devaluing currency

Section: Daily Dispatches

Go, Haruhiko, go!

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'No Limit' to Japan Easing, Says Kuroda

By Robin Harding
Financial Times, London
Wednesday, February 3, 2016

TOYKO -- Haruhiko Kuroda said there was "no limit" to monetary easing as he vowed to slash Japanese interest rates deeper into negative territory if necessary.

In his first speech since last week's surprise cut in interest rates to minus 0.1 per cent, the Bank of Japan governor said there was more room to ease and that he would invent new tools rather than give up his goal of 2 per cent inflation.

"Going forward, if judged necessary, it is possible to cut the interest rate further from the current level of minus 0.1 per cent," said Mr Kuroda, pointing to the Swiss National Bank at minus 0.75 per cent and the Riksbank at minus 1.1 per cent, as examples of what the BoJ could do.

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The speech raises the chances of future monetary easing in Japan, signalling that Mr Kuroda is fully committed to negative interest rates despite ruling them out for months before a sudden change of heart.

In a paean to the magnificence of central banks -- delivered despite the global weakness of inflation -- he declared they were close to conquering the problem that interest rates cannot go below zero.

"The constraint of the 'zero lower bound' on a nominal interest rate, which was believed to be impossible to conquer, has been almost overcome by the wisdom and practice of central banks, including those of the Bank of Japan," said Mr Kuroda.

"It is no exaggeration that [ours] is the most powerful monetary policy framework in the history of modern central banking," he said. ...

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