Bank of Japan Governor Haruhiko Kuroda said Wednesday that the central bank has “ample room” to ramp up its easing measures and is ready to cut interest rates deeper into negative territory if necessary in order to meet his ambitious inflation target.

Kuroda shocked global markets last week by deciding to set a key interest rate below zero, in a desperate attempt to save his embattled campaign to defeat deflation and generate 2% inflation. The move helped send Tokyo shares sharply higher, but it also added to speculation that the bank’s main policy of flooding the economy with cash through asset purchases has reached its limit.

The BOJ governor added that the size of asset purchases from the current annual pace of ¥80 trillion, referring to the two-thirds of outstanding Japanese government bonds left in the market and suggesting that he wasn’t ruling out an increase in the bank’s pace of buying JGBs.

No Limit to Available Measures

Kuroda is convinced “that there is no limit to measures for monetary easing” and said that although Japan’s economy was recovering moderately, it was taking longer than expected to achieve his 2 percent inflation target due to slumping energy costs.

According to him, the markets somewhat overreacting to fears of China’s slowdown and that China’s economy is sustaining stable growth as a whole thanks to aggressive policy steps taken by authorities. He added that Japan is still only half way in meeting BOJ’s price target and that the timespan between each monetary easing decision doesn’t matter in defining whether boj is acting “incrementally”.

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