BANK of Japan (BOJ) Governor Haruhiko Kuroda said yesterday that while Japan’s financial system remained stable, the central bank will monitor market developments in the wake of Greece’s referendum that voted against European bailout terms.

    He also reiterated that the BOJ will maintain its massive monetary stimulus for as long as needed to achieve its 2 percent inflation target.

    “Japan’s economy is expected to continue recovering moderately,” he said in a speech at a quarterly meeting of the central bank’s regional branch managers.

    The BOJ has stood pat on monetary policy since expanding stimulus in October last year to prevent slumping oil prices, and a subsequent slowdown in inflation, from delaying a sustained end to nearly two decades of deflation.

    “The direct economic and financial relations between Japan and Greece are limited. But government and Bank of Japan officials have held discussions early this morning” to ensure Japan responds smoothly to any market response as needed, Kuroda said.

    Finance Minister Taro Aso also said that while Japan was in close contact with overseas policymakers on the Greek referendum, it was confident that Europeans have sufficient safeguards in place to respond to market disruptions.

    “I understand that European countries ... are calling on the Greek Government to act responsibly” in the wake of the referendum results, Aso said.

    Japanese financial institutions have very limited exposure to Greek debt, while Japan’s direct trade with Greece is also minimal.

    Both Kuroda and Aso did not mention how Tokyo may respond if developments in Greece jolt markets. (SD-Agencies)