BoJ Chief Says Bond Buying Lifted Stock Prices, Restrained Bond Yields

(RTTNews) - Bank of Japan's Governor Haruhiko Kuroda said bond buying has started to exert effects and monetary easing does not necessarily lead to cross-border capital outflows.

The rise in stock prices, stable long-term interest rates and a favorable turn in the public's expectations are the results of bond buying program, Kuroda said Saturday at a symposium hosted by the Federal Reserve Bank of Kansas City.

Private consumption remains resilient on the back of improved household sentiment. Moreover, he noted that business fixed investment showed signs of picking up in tandem with business sentiment and corporate profits.

Further, he said the implementation of quantitative easing has raised inflation expectations and thus the policy started to exert its intended effects.

Concluding his speech, Kuroda said the relationship between unconventional monetary policy and cross-border capital flows is quite complicated and such policies will not lead to capital outflows.

"Almost all base money provided through monetary policy will be accumulated in the form of deposits with a central bank," said BoJ chief. "Even if a country eases monetary conditions, this does not necessarily mean that money being provided directly "spills over overseas."