NUSA DUA, Indonesia (Reuters) - Bank of Japan Governor Haruhiko Kuroda on Friday painted an upbeat view on the global economy despite the recent market rout, saying that robust corporate profits and solid fundamentals will underpin growth in advanced economies.
Fears that escalating global trade tensions and rising U.S. interest rate hikes could dent growth have roiled global markets and prompted warnings by the International Monetary Fund on heightening risks to the world economic outlook.
But Kuroda was unfazed by the market turbulence, projecting that strong Japanese and overseas corporate profits will help prevent stock markets from tanking further.
“There’s no change to the solid fundamentals of Japan, the United States and European economies,” Kuroda told reporters after attending a G20 finance leaders’ gathering held on the sidelines of the IMF meetings in Bali.
“We will continue to carefully watch the impact domestic and overseas market moves could have on Japan’s economy and prices,” Kuroda said.
Kuroda’s remarks suggest the BOJ likely won’t make big changes to its rosy growth estimates when it conducts a quarterly review of its projections at this month’s rate review.
But a senior Japanese Ministry of Finance (MOF) official said Tokyo won’t let its guard down against volatile stock and currency market moves that could hurt the export-reliant economy.
“We’re watching market moves with vigilance. There’s no change to that stance,” even though stocks rebounded and the yen weakened somewhat on Friday, the official told reporters.
Reporting by Leika Kihara; Editing by Simon Cameron-Moore