2023-05-02 05:57:16
After the concerns of the banking sector returned to the fore, Japanese Economy Minister Shigeyuki Goto confirmed on Tuesday that the problems of the banking sector in the United States and Europe will not affect the Japanese economy and the financial system at the present time, and said that their main reason was liquidity risks and high interest rates.
JPMorgan Chase acquired the assets of First Republic Bank in a deal to resolve the biggest failure of a US bank since the 2008 financial crisis.
The Minister of Economy said, “What happened to the West reflects the size of liquidity risks and the reflection of high interest rates on the sector. Financial institutions and authorities will need to respond firmly to these liquidity risks.” He also stressed that he does not see that the US financial sector is facing major problems.
On the impact of US banking problems on the Bank of Japan’s efforts to adjust monetary easing policy in the future, Goto said he expects the central bank to direct this flexibly and appropriately, without going into further details.
He added that there are factors that require attention and follow-up, such as lowering the expectations of the global economy, and fluctuations in financial markets, with Western countries continuing to tighten monetary policy.
The minister stressed that “the Bank of Japan, as a central bank, is responsible for handling monetary policy operations, and at the present time I do not see that the current financial situation affects Japan’s economy and the financial sector as a whole.”
“I expect the Bank of Japan to guide monetary policy flexibly, which means the central bank should do so appropriately while taking into account the economy and financial markets,” he added.
The Bank of Japan had kept interest rates unchanged at very low levels, but announced a plan to review its previous moves in monetary policy, paving the way for new governor Kazuo Ueda to phase out the massive stimulus program undertaken by his predecessor.
With regard to the Japanese economy, the Cabinet Office is scheduled to announce preliminary data on gross domestic product in the first quarter of 2023 on May 17.
Forecasts indicate that Japan’s gross domestic product will increase by 0.2 percent on a quarterly basis in real price-adjusted terms, in the period from January to March, or by 0.8 percent on an annual basis, for the second consecutive quarter.
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