TOKYO (AFX-ASIA) - Bank of Japan governor Masaru Hayami said he sees "no need to increase" outright purchases of long-term government bonds.
The comments follow the central bank's decision last week to widen the targeted maturities for its outright purchases of government bonds to include two-, four-, five- and six-year securities.
"With these improved operations, we will continue to inject ample funds into the market and strengthen the function of the market," Hayami said, adding that the decision was due to growing market needs for mid-term government bonds.
He said the repeated failure to inject the targeted amount of funds into the banking system through short-term treasury bills is "proof that substantial funds are already circulating across the broad front of the market."
However, he added that if need be, the BoJ will increase outright purchases of long-term government bonds as it pledged at the March 19 policy board meeting.
Meanwhile, Hayami said: "I will continue to devote my energy to serving in my job," adding: "It is not true that I tendered my resignation" to the previous Cabinet.
"It is true that I am old but my health is in good condition and looking at Mr (Masajuro) Shiokawa, who is three years older than me, I think I can do it a little longer," he said.
Hayami did not confirm whether he will stay in the position until his term expires in March 2003, saying simply: "The term won't move." He also declined to comment directly on whether he may tender his resignation after the Upper House election in July, saying: "If you know anything (about such speculation), please tell me."
Meanwhile, Hayami added: "It is premature to conclude that there will definitely be a recovery in the U.S. economy in the second half of this year."
Hayami said the prospects for the Japanese economy, which has entered an adjustment phase recently on the rapid slowdown of the U.S. economy, continues to rely on the performance of the U.S.