Top Japanese Officials Criticize Investors For Excessive Risk Aversion

On Monday (February 22nd), Kuroda Higashihiko, governor of the Bank of Japan, said that the continued turbulence in the market should be attributed to the excessive risk aversion of investors.

In the face of various doubts raised by the people about the effectiveness of the negative interest rate policy, Kuroda Higashihiko also defended.

Kuroda Higashihiko also refutes the view that the radical stimulus policy may make Japan's banking system unstable.

Critics have pointed out that the central bank's stimulus policy has squeezed bank lending, while Kuroda Higashihiko stressed that even in the years of implementing ultra loose monetary policy, banking revenues have been rising.

Kuroda Higashihiko said in parliament that banking revenues have been rising and that the number of bankruptcies has declined due to economic recovery.

In addition, lending in the banking sector is also growing.

He believes that the growth of lending in the banking sector will have a positive impact on the Japanese economy.

Japan January

An increase of 2.3% over the same period last year was the fifty-second consecutive month of increase.

Opposition legislators have asked Kuroda Higashihiko to go to Congress almost every day, asking him questions about the central bank's negative interest rate policy.

The negative interest rate policy has pushed the yield of government bonds to a negative value, but it has failed to boost Japanese stocks or contain the yen's rise as determined by the policymakers.

And January 29th

When the central bank accidentally introduced the negative interest rate policy, the Nikkei index of Japanese stocks fell by nearly 6%, while the US dollar fell by about 5% against the yen.

Democratic congressman Suzuki Katsuma told Kuroda Higashihiko in Congress that some retailers advocated consumers to buy safe boxes to avoid suffering from negative interest rates, indicating that the central bank policy is causing families and businesses to worry about spending money on banks instead of spending money.

Kuroda Higashihiko defended his stimulus policy, saying that he had family support.

It also helps economic growth by pushing mortgage rates down and lowering the cost of real borrowing.

He said that the external factors such as the prospect of US monetary policy and other investors' concerns about the European banking industry are also part of the recent market turmoil.

On the same day, Japanese finance minister Taro Aso said he would continue to pay attention to the trend of financial market.

Risk aversion is spreading across the financial markets.

For the Japanese stock market, Taro Aso believes that the stock price is a leading indicator, it is not clear whether the stock price shows the reality, and the stock price is the clearest indicator of "Andouble economics".

In addition, Nagawa Kibayashitaro, deputy secretary of the OECD, said Japan must improve its potential economic growth, and Japan needs a broader and bold structural reform.

Kuroda Higashihiko said he hoped to observe the impact of recent market fluctuations on Japan's economy and prices.

Last month, the Bank of Japan unexpectedly announced a negative interest rate on some of the funds deposited in the central bank by financial institutions.

Analysts say that negative interest rates make regional banks worse hit by low returns on loans and weak corporate borrowings, which may also put pressure on them to integrate or accept bigger initiatives.