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BoJ's Kuroda Says Extremely Low Rates Likely To Remain Beyond H1 2020

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Japan's extremely low interest rates are likely to remain at the current levels for an extended period, beyond spring 2020, given the uncertainties surrounding economic activity and prices, Bank of Japan Governor Haruhiko Kuroda said Friday.

BoJ would "maintain the current extremely low levels of short- and long-term interest rates for an extended period of time, at least through around spring 2020," Kuroda said in a speech in Tokyo.

The central bank will hold rates unchanged, taking into account uncertainties regarding economic activity and prices including developments in overseas economies and the effects of the scheduled consumption tax hike, he added.

Nonetheless, Kuroda said there was no need to be pessimistic about the current situation.

The BoJ governor observed that the momentum toward achieving the price stability target has been maintained. The bank forecast annual inflation to increase gradually toward 2 percent, although this will still take time, Kuroda noted.

He also stressed that developments in overseas economies and sustainability of domestic demand are factors that influence Japan's economic outlook.

BoJ does not consider that overseas economies will continue to deteriorate all the way. However, Kuroda said it is necessary to maintain firm domestic demand until overseas economies pick up.

At the latest policy meeting, BoJ board members held the view that there are high uncertainties regarding the outlook for economic activity and prices, and it is likely to take time to achieve the price stability target.

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