Japan's central bank Vice President Yoshihiko Yumiyama said on Friday that the Bank of Japan will not rule out any policy options, including further negative interest rate cuts, if it wants to further expand its stimulus measures.
"At present, our basic forecast scenario is that Japan's economy will continue to expand moderately and gradually push inflation to our target level," he said in a speech at Reuters Focus Event.
"But there are downside risks. If these risks hurt the economy's momentum to achieve price targets, we will not hesitate to relax policy, "he said.
As trade frictions between China and the United States hurt global demand and clouded Japan's economic outlook, some analysts predicted that the Bank of Japan might relax monetary policy as early as this month's policy review meeting.
The Bank of Japan has said it has four options for easing policy: lowering negative interest rates, lowering the yield target for long-term bonds, expanding asset purchases, and accelerating money printing.
However, financial institutions have been criticizing the Bank of Japan's negative interest rate policy, saying that it damages their profits and threatens to destabilize Japan's financial system.
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