Bank of Japan (BOJ) Governor Haruhiko Kuroda attends a news conference at the BOJ headquarters in Tokyo, Japan October 31, 2018. REUTERS/Issei Kato
NAGOYA, Japan (Reuters) – Bank of Japan Governor Haruhiko Kuroda said on Monday the central bank would “of course” seek an exit from ultra-easy policy when inflation reaches its 2 percent target.
“When the BOJ seeks an exit from easy policy, the yield curve will steepen and interest rates will rise,” Kuroda said in a meeting with business leaders in Nagoya, central Japan.
But higher interest rates alone won’t fix structural problems that are weighing on regional banks’ profits, such as a dwindling population and a lack of funding demand as more firms relocate to bigger cities, he said.
Reporting by Leika Kihara; Editing by Chang-Ran Kim