MACROECONOMICS - NAGOYA. Bank of Japan Governor Haruhiko Kuroda said on Tuesday the central bank has not limited its monetary easing tools to interest rate cuts, stressing that other options remain on the table if it were to ramp up stimulus.
The BOJ kept policy steady last week but tweaked its forward guidance - or a promise central banks make on future monetary policy - to say it will maintain ultra-low rates or even cut them for as long as needed to gauge overseas risks.
Kuroda said the new forward guidance reflected the BOJ's stance of leaning more toward additional easing and its "downward bias on policy rates".
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But he added that rate cuts were only among the four options the central bank had in easing policy, which included an increase in asset purchases and an acceleration in the pace of its monetary printing.
"(The new forward guidance) does not limit additional monetary easing measures to rate cuts," Kuroda said.
"There is no change to our understanding that, besides lowering policy rates, there are various possible measures for additional easing," he said in a speech to business leaders in Nagoya, central Japan.
The bitter Sino-U.S. trade war and slumping global demand have hurt Japan's exports, though robust domestic demand has eased some of the pain for the world's third-largest economy.
Kuroda said the timing of a pick-up in global growth was likely delayed by about half a year from what the BOJ had previously expected.
But he maintained his optimistic view on Japan's economy, saying it will sustain a moderate expansion on robust capital expenditure and a tight job market that is helping households weather the pain from a sales tax hike in October.
"Although the timing of a pick-up in overseas economies has been delayed, our view is that Japan's economy will not decelerate substantially," he said, suggesting the BOJ may hold off on ramping up stimulus unless upcoming data point to a sharp worsening of conditions.
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Under a policy dubbed yield curve control, the BOJ pledges to guide short-term rates at -0.1% and the 10-year government bond yield around 0%.
Kuroda has repeatedly said the BOJ would seek to push down short- to medium-term borrowing costs, without causing an excessive decline in super-long yields, if it were to ease more.
He had previously said global growth will rebound sometime this year through early next year.
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