Financial markets are improving and keeping the Bank of Japan's emergency credit program in place for too long may cause distortions, BOJ Deputy Gov. Kiyohiko Nishimura said Wednesday.
"Excessive concerns are easing considerably and market functions are improving significantly," Nishimura told reporters in Kobe. "Prolonging safety-net measures may cause the problem of moral hazard."
Earlier in a speech, Nishimura stressed that ending the program of buying corporate debt from lenders is a separate matter to interest-rate policy. Economists expect the BOJ to end the credit steps by the end of the year, while leaving the benchmark rate at 0.1 percent through all of 2010 amid prolonged deflation and tepid economic growth.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.