Business & Economy

Suga, BoJ to maintain coordination within ‘Abenomics’ framework

Tokyo, Sep 23 (efe-epa).- Japan’s new prime minister, Yoshihide Suga, on Wednesday held his first meeting since taking office with Bank of Japan (BoJ) Governor Haruhiko Kuroda, with whom he agreed to maintain coordination of monetary and fiscal policy within the economic strategy of his predecessor known as “Abenomics.”

Suga became the prime minister of Japan on Sep. 16 following Shinzo Abe’s resignation owing to health reasons and has promised to continue the program launched by his predecessor in cooperation with the BoJ, consisting of a combination of structural reforms, public spending and monetary easing.

After their meeting, Kurodo said that there was “no change at all” to BoJ’s position on the program agreed with Abe in early 2013 and whose ultimate objective is to bring the year-on-year inflation of the Japanese economy to around 2 percent.

“I agreed with the prime minister that the government and the BOJ will continue to communicate sufficiently and proceed with policies in firm coordination,” Kuroda said in statements to the media.

The BoJ governor also noted that both sides “have fulfilled their respective roles” on the basis of what was agreed more than seven years ago, which has yielded positive results for the economy, and added that they will continue along those lines.

At its monetary policy meeting last week, the BoJ board, led by Kuroda, decided to keep unchanged its broad monetary easing program as well as the numerous measures implemented to cushion the impact of the COVID-19 pandemic on the private sector.

The general lines of its easing strategy include setting the short-term policy interest rate at -0.1 percent and keeping the long-term government bond yields at about 0 percent.

Added to this is a zero-cost credit program for firms totaling 110 trillion yen ($1 trillion) and an initiative to buy exchange-traded funds and other investment assets, measures adopted in recent months to shore up liquidity in companies and financial markets.

The bank said the Japanese economy “has started to pick up with economic activity resuming gradually, although it has remained in a severe situation due to the impact of the novel coronavirus (COVID-19) at home and abroad,” according to a statement by the bank.

Both the BoJ governor and the new Japanese prime minister have expressed their willingness to take more stimulus measures if necessary. EFE-EPA


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