Negative interest rates mean that the Bank of Japan is the currency war - Kuroda
TOKYO (Reuters) - The Central Bank is not engaged in a currency war, introducing negative interest rates, said the head of the Bank of Japan Haruhiko Kuroda, stressing that this measure is aimed at stimulating the economy by lowering the cost of credit.
He also reiterated that the Bank of Japan is determined to further reduce interest rates or the expansion of asset buying, if the risks will threaten the timely achievement of a 2 per cent inflation target.
"Unlike the Fed, the European Central Bank or any other major Central Bank, the Bank of Japan is not aimed at the exchange rates determining monetary policy, - Kuroda said in a speech in parliament. - Reducing interest rates and the yield curve, we hope to reduce real interest rates to stimulate consumption and investment".
The Bank of Japan unexpectedly set the key rate at minus 0.1 percent on Friday, shocking investors another bold maneuver, aimed at reviving the country's economy in the face of market volatility and a slowdown in global growth.
Many analysts have considered this decision an attempt to prevent the yen's rise as a safe Japanese currency jumped to an annual peak of the dollar in the past month amid widespread risk aversion.
Kuroda rejected the view that the regulator step was aimed at weakening the yen, adding that no major central bank will not participate in a competitive currency devaluation.
"If someone thinks that the major central banks are pursuing a policy (to join the currency war), then he is mistaken", - he said.
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