Sept 19 (Reuters) - The Bank of Japan kept monetary policy steady on Thursday but signalled the chance of expanding stimulus as early as its next policy meeting in October by issuing a stronger warning over the risks threatening the economy.
As expected, the BOJ maintained its short-term interest rate target at -0.1% and a pledge to guide 10-year government bond yields around 0% under its yield curve control (YCC) policy.
Announcing its decision, the central bank said in a statement that it was becoming necessary to pay “closer attention” to the chance that the economy will lose sufficient momentum to achieve the BOJ’s 2% inflation target.
Following are comments from BOJ Governor Haruhiko Kuroda at his post-meeting news conference:
ECONOMIC OUTLOOK “Exports, output and manufacturers’ sentiment are weakening. But consumption and capital expenditure are fairly strong. Domestic demand is firm. I don’t think Japan’s economic outlook is worsening sharply, or that the economy is about to lose momentum for hitting our price goal.”
“We’re yet to see signs of a pickup in overseas growth ... We’re not changing our baseline scenario on the overseas economy. But risks surrounding overseas growth are heightening.”
WHEN ASKED WHETHER THE BOJ HAS BECOME MORE KEEN TO EASE POLICY COMPARED WITH THE PREVIOUS MEETING IN JULY? “Yes, that’s the case. We are more eager to act given heightening global risks.” (Reporting by Leika Kihara, Editing by Subhranshu Sahu)