Bank of Japan Governor Haruhiko Kuroda ruled out the idea of using “helicopter money” – or directly underwriting the budget deficit – to combat deflation, as policymakers in Tokyo gear up to expand existing stimulus programs.
Japanese markets have risen this month on speculation that authorities, battling to revive an economy dogged by decades of anemic inflation, will resort to using helicopter money, possibly issuing perpetual bonds to underwrite public debt.
But in a BBC interview broadcast on Thursday, Kuroda said the central bank already had mechanisms in place to ease policy further if needed, and that Japan should not forfeit a clear separation between fiscal and monetary institutions.