(Reuters) – Bank of Japan Governor Masaaki Shirakawa said on Wednesday that there was absolutely no change to the central bank’s stance of continuing to pursue powerful monetary easing to beat deflation.
But Shirakawa said he saw the drawbacks outweighing the benefits in cutting interest rates, including lowering the 0.1 percent interest that the BOJ pays to financial institutions’ excess reserves parked at the central bank.
He also ruled out targeting longer-dated government bonds in the central bank’s asset-buying program in the near future, saying he did not see an immediate need to do so in order to achieve the central bank’s existing target for asset purchases.
The central bank kept monetary policy steady on Wednesday as widely expected after having offered stimulus just last month, saving ammunition for later in case Europe’s deepening debt crisis warrants further supportive action to shield the fragile economy.
(Reporting by Leika Kihara, Rie Ishiguro and Tetsushi Kajimoto; Editing by Edmund Klamann and Chris Gallagher)