Comments made by BOJ Governor Kuroda at a Reuters news conference

(Reuters) – The Bank of Japan cut its growth forecast for this year on Friday, but maintained its view that the economy was focused on a medium-term recovery; signal money policy will be maintained for a long time.

The BOJ has also released an outline of its new scheme aimed at boosting activities to combat climate change, to provide banks with long-term loans that are of no interest.

Below are summaries of comments made by the BOU governor, Haruhiko Kuroda, at a post-meeting press conference in Japanese, translated by Reuters:

PANDEMIC EFFECT

“Japan’s economic activity will be low at the moment due to the state of emergency. But exports and outflows are constantly growing thanks to the global recovery … It is likely that the Japanese economy will recover as vaccines progress and the pandemic will calm down.”

CLIMATE CHANGE SCHEME

“We will require notification to financial institutions to be among the strongest knowledge options based on the TCFD guidelines.

“As for the projected size of the scheme, we don’t have specific data on how we set the details of the conditions. But many financial institutions are already making a number of climate-related loans and investments, so be of significant size.

“The greatest mandate of central banks depends on prices and financial stability. At the same time, we know that climate change has a long-term impact on the economy and the financial system. In addition to what governments and parliaments do, we discussed what central banks can do. as it was how much we have to do and what we can do.

“We are paying interest rates under our COVID mitigation program because it is close to providing funding to companies affected by the pandemic … We are not giving interest to the climate scheme, but I think we are offering enough other incentives.”

BOJ’S CLIMATE SCHEME TO FINANCE EXTERNAL LOANS

“It’s true that foreign investment can help Japan cope with climate change, so we don’t rule out the possibility. But our core position is that we focus on home loans and investments.”

BOJ WILL RECEIVE GREEN VOUCHERS IN ACCORDANCE WITH MONEY POLICY

“I don’t think it’s appropriate for the BOJ to extend loans at this stage by judging what is green and what is not green. Instead, we want to indirectly promote climate change activities through private financial institutions.

“I don’t think there will be a globally agreed taxonomy around green any time soon. That doesn’t mean we can wait until an agreement is reached, which is why we decided to launch this climate scheme.”

IN THE LAST INFLATION OF THE CONDITION

“The recent rise in commodity prices reflects a rapid rebound in global demand and a reduction in short-term supply … The rise is driven mainly by the economic recovery in the economy. Worsening trade conditions could hurt profits in some companies. They are strong in Japan.

“Overall, the merits of the Japanese economy through strong exports outweigh the merits of worsening trade conditions. Taken together, it is working on behalf of the Japanese economy. There are differences between companies in the impact of rising commodity prices. So it will closely monitor developments.

“The BOJ can prioritize green bonds in asset purchases when there is a global agreement on the taxonomy. But that’s not something that can be considered in the short term.”

BOJEN’S NEW GUIDELINES ON THE OPERATION OF ITS PURCHASE

“The move is aimed at improving the functioning of the market. They can move within the range we have set for long-term rates, reflecting the development of the domestic and foreign economy and prices. It is not as if we intend to reduce bond purchases.