Investing.com - Bank of Japan Governor Haruhiko Kuroda Monday said expanded monetary easing has a powerful effect of boosting share prices and leading the yen weaker, which would support economic growth and inflation.
Kuroda told an economic seminar that while the BoJ's newly adopted negative interest rate policy hurts the profitability of financial institutions, it should benefit households and businesses by lowering borrowing costs further.
"The decline in yen interest rates and the fact that further monetary easing is possible - all else being equal - have a positive impact on asset prices. In other words, the policy works in the direction of raising stock prices and lowering the value of the yen," he said.
Given that the fundamentals of Japan's economy and Japanese firms remain strong and that the negative interest rate policy will have powerful effect, financial markets will turn positive as investor confidence returns."