Bank of Japan Kuroda speaking to a business group today
- Wants to dispel concerns that QQE cannot be expanded further
- Cannot deny that qqe with negative rate has an adverse effect on financial institutions' earnings
- Aim of QQE with negative rate is to benefit households, firms and ultimately to fully overcome deflation
- By making full use of qqe with negative rate, boj will achieve 2 pct inflation at earliest possible time
- Deflation will not return, 2 pct inflation target will definitely be achieved
- Negative rates offer big benefits to individuals and corporates
- Decline in lending rates is clearly larger than decline in savings deposit rates
- Low interest rate environment will hurt bank earnings over long run
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Note, Kuroda is appearing in the Japanese parliament later today also
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Added. He's still going:
- Japan banks are very healthy, have solid capital base
- Decline in yen interest rates and fact further easing is possible have positive impact on asset prices
- Japan banks still able to secure high earnings due to econ recovery
- Current policy has effect of raising stock prices, lowering yen but these effects now being outweighed by excessive risk aversion
- Fundamentals of Japan's economy and japanese firms remain strong
- Given competition to extend loans, it is difficult for Japan banks to raise lending costs
- Escaping deflation is the only way to improve banks' earnings
- Decline in Chinese stock prices can be seen as correction of bubble rather than sudden deterioration in China's fundamentals
All via Reuters headlines
