BOJ Wakatabe warns against pricking bubbles with monetary tightening

FILE PHOTO - Deputy governor of the Bank of Japan Masazumi Wakatabe speaks during an interview with Reuters in Tokyo, Japan, June 27, 2018. REUTERS/Kim Kyung-Hoon - Copyright Kim Kyung Hoon(Reuters)

By Reuters

Published on 25/10/2018 - 04:34•Updated 19/04/2024 - 04:02

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TOKYO (Reuters) - Bank of Japan Deputy Governor Masazumi Wakatabe said on Thursday that trying to prick asset-inflated bubbles with tighter monetary policy could tip economies into a serious recession.

Instead of trying to pre-empt asset bubbles, central banks should focus on taking quick and sufficient steps to reflate growth in the wake of a financial crisis, he said.

"As downward pressure is exerted on the economy in the wake of a crisis, it would be necessary to respond with vigorous expansionary macroeconomic policies," Wakatabe said in a speech at a seminar.

(Reporting by Leika Kihara; Editing by Chang-Ran Kim)

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