BOJ's Kuroda says globalisation will be sustained despite COVID-19

FILE PHOTO: Bank of Japan (BOJ) Governor Haruhiko Kuroda, speaks during an interview with Reuters in Washington, U.S. October 19, 2019. REUTERS/Carlos Jasso

TOKYO (Reuters) - Globalisation will be sustained and supply chains will be diversified as firms adjust to novel coronavirus disruption, Japan’s central bank governor said on Friday, challenging an assumption the virus will lead to fragmentation of world trade.

Resorting to protectionism was not the answer, Bank of Japan (BOJ) Governor Haruhiko Kuroda said.

“Globalisation and global supply chains will continue, although supply chains will be more diversified and more resilient,” Kuroda said at a seminar organised by the Asian Development Bank.

Regional financial cooperation was important in coming years as it would offer a safety net in case of another shock, he said.

“We will have to continue timely and decisive action, while closely monitoring the impact of COVID-19,” Kuroda said.

“At the same time, we must ... turn this crisis into opportunity to accelerate digitalization and facilitate innovation,” said Kuroda, who was head of the Asian Development Bank before assuming the post of BOJ governor in 2013.

Kuroda said Japan’s economy would likely continue to improve but at a moderate pace, given the worldwide impact of the coronavirus.

“The BOJ will continue supporting the economy in cooperation with the new government” led by Yoshihide Suga, he said.

Analysts do not expect any major change to the relationship between the BOJ and an administration led by Suga, who spearheaded his predecessor Shinzo Abe’s strategy to revive the economy with bold monetary and fiscal measures.

Reporting by Leika Kihara; Editing by Chang-Ran Kim