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The
remarks reinforce market expectations the BOJ will remain an
outlier among a global wave of central banks raising interest
rates to combat soaring inflation.
"Uncertainty regarding Japan's economy is very high" given risks
such as the COVID-19 pandemic's impact, Ukraine crisis and
rising commodity costs, Kuroda said, adding the BOJ was closely
watching the impact currency moves may have on the economy.
"We won't hesitate to take additional monetary easing steps as
necessary" with an eye on risks, Kuroda said in a speech to a
quarterly meeting of the central bank's branch managers.
Kuroda also repeated the BOJ's policy guidance that the bank
expects short- and long-term interest rate targets to "move at
current or lower levels."
In a quarterly report issued on Monday, the BOJ raised its
assessment for seven of Japan's nine regional areas as
consumption showed signs of recovery from the pandemic's hit.
The yen has slid against the dollar on expectations the BOJ will
keep monetary policy ultra-loose, widening the divergence
between the U.S. Federal Reserve's aggressive rate hike plan.
The dollar climbed to a 24-year high on the yen on Monday after
Japan's ruling coalition's strong election result indicated no
change to ultra-easy monetary policy.
Under its yield curve control policy, the BOJ pledges to keep
short-term rates at -0.1% and the 10-year bond yield around 0%
as part of efforts to fire up inflation to its 2% target.
While inflation exceeded 2% for two straight months in May due
largely to rising fuel costs, Kuroda has shrugged off the chance
of a near-term rate hike on the view such cost-push inflation
will prove temporary unless accompanied by higher wage growth.
(Reporting by Leika Kihara; Editing by Christopher Cushing and
Sam Holmes)
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