NAGOYA -- Corporate earnings and employment have significantly improved thanks to large-scale monetary easing measures implemented since the spring of 2013, Bank of Japan Gov. Haruhiko Kuroda said Monday.
"We're no longer in a situation where decisive implementation of large-scale [monetary easing] measures to overcome deflation was judged to be the best policy," Kuroda said during a speech in Nagoya, referring to Japan's current economic activity and prices.
However, he noted the possibility that the country's financial system may destabilize, saying, "If financial institutions more actively take risks to secure earnings, the financial system may become unstable should a substantial negative shock occur in the future."
Kuroda also discussed the risk that the deterioration of financial institutions' operational strength due to prolonged low interest rates could lead them to adopt a negative stance toward lending.
The 2 percent inflation target set by the BOJ, however, is still far from being achieved. "Given the rather complicated economic and price developments, we'll persistently continue strong monetary easing, while thoroughly considering in a balanced manner both the positive consequences and side effects of our policy," he said.
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