The Bank of Japan shouldn't end its emergency credit programs prematurely because that could stymie a recovery, BOJ Policy Board member Tadao Noda said Thursday.
"We need to avoid ending measures too early," Noda said in a speech in Matsumoto, Nagano Prefecture. Still, "having extraordinary policies in place for too long may prevent the economy and financial markets from recovering on their own, raising the risk economic activity and prices will swing."
The central bank this month extended the credit-support programs of buying corporate debt from banks and providing them with unlimited loans to Dec. 31 from Sept. 30, citing "severe" borrowing conditions amid the worst postwar recession. Policy Board members may be compelled to extend those measures further should conditions fail to improve.
"Noda subscribes to the view that the Bank of Japan will have no other choice but to extend the credit-support programs," said Mari Iwashita, chief market economist at Daiwa Securities SMBC Co. in Tokyo.