Asia

Thursday, October 6, 2016 - 02:23

BOJ Kuroda Again Denies BOJ Purchase of US Treasury Bonds


TOKYO (MNI) - Bank of Japan Governor Haruhiko Kuroda Thursday again denied the idea that the BOJ would buy U.S. Treasury bonds as only the finance minister has the authority to deal with foreign exchange rates.

"Transactions in foreign exchange markets to stabilize foreign exchange rates is limited to the finance minister," Kuroda told lawmakers in response to a question whether the bank had any such purchase plans.

Opposition lawmakers noted that the BOJ would face a limit in buying the necessary Japanese government bonds and hence should consider buying foreign bonds.

Kuroda also said that the BOJ as well as other central banks in industrialized nations are prohibited from directly underwriting Japanese government bonds.

"We are buying government bonds to achieve the 2% price target," Kuroda said.

Kuroda said that he doesn't expect the BOJ to run out of JGBs to purchase.

He said that the BOJ's easy policy would not lead to hyper-inflation.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@mni-news.com
--MNI Singapore Bureau; tel: +65 9189-5705; email: sumathi.vaidyanathan@mni-news.com

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