April 14, 2020 / 2:30 PM / 2 months ago

BOJ's Kuroda told G7 ready to ease policy to combat coronavirus fallout

FILE PHOTO: Bank of Japan Governor Haruhiko Kuroda attends a news conference in Tokyo, Japan March 16, 2020, in this photo released by Kyodo. Mandatory credit Kyodo/via REUTERS

TOKYO (Reuters) - Bank of Japan Governor Haruhiko Kuroda said on Tuesday he explained to his G7 counterparts that the central bank would not hesitate easing monetary policy further depending on how the coronavirus pandemic affects the country’s economy.

“It’s true the economy is coming under pressure from the global spread of the coronavirus,” Kuroda told reporters after attending a teleconference with finance leaders from the Group of Seven advanced economies.

“I explained to my G7 counterparts that we will ease monetary policy without hesitation if needed, with a close eye on developments regarding the coronavirus pandemic.”

The International Monetary Fund’s projection that global growth will recover in the latter half of this year was “an idea worth taking into account”, Kuroda said.

“The outlook is highly uncertain, so we need to scrutinise developments over the pandemic carefully,” he said.

In its World Economic Outlook report, the IMF said the global economy is expected to shrink by 3% during 2020 in a stunning coronavirus-driven collapse of activity that will mark the steepest downturn since the Great Depression of the 1930s.

The IMF’s forecasts assume that outbreaks of the novel coronavirus will peak in most countries during the second quarter and fade in the second half of the year.

Kuroda’s remarks come ahead of the BOJ’s closely watched policy meeting on April 27-28, when it will issue fresh quarterly growth and inflation forecasts.

Sources have told Reuters the BOJ will discuss further steps to ease corporate funding strains this month to pump more money into firms grappling with slumping sales.

Reporting by Takahiko Wada, Writing by Leika Kihara; Editing by Alison Williams

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