The Bank of Japan is on its guard against further economic turbulence in the wake of the recent terrorist attacks in the United States, BOJ Gov. Masaru Hayami said Tuesday.
"While the economic effects of the terrorist attacks have been limited so far . . . we still do not know when (economic conditions and share prices) will settle down," Hayami said during a regular news conference.
The Sept. 11 terrorist attacks in New York and Washington are likely to accelerate the growing uncertainty about the global economy, the BOJ said last week.
This comes at a time when falling corporate profits are already causing rising unemployment and a decrease in wages, it added.
Referring to the fluctuation in share prices, Hayami said, "I do not think this will cause immediate instability in the financial markets, taking into account the stamina of the nation's banks."
The BOJ has been anxiously watching share prices as banks prepare to close their books for the first half of the fiscal year.
The nation's banks do not presently require capital injections, according to Hayami.
"Banks' capital bases have been reinforced considerably from past capital injections. We can see that in the numbers," he said. "They have secured a passable level."