Bank of Japan's Miyao says the economy is looking up

(Source: Reuters)

Bank of Japan board member Ryuzo Miyao has said that the central bank has taken all necessary steps for the time being, and that Japan's economy is now starting to pick up. He added that policy adjustments will be made as needed if risks to the economy or prices materialise.

The former academic said that it was important to keep close communication with the markets, and that it is vital to avoid a rate rise resulting from fiscal issue. Miyao stressed that long and short-term interest rates should follow a stable path.

Professor Koichi Hamada, the architect of Abenomics, said that the Japanese stock market drop was a "natural correction" after a week of volatile activity in Asian markets.

He said that the recent plunge had not represented market fundamentals, leading some to voice concerns that instability has been driven by the Bank of Japan's unprecedented monetary easing.

The economist said that if Japan reached appropriate conditions with just one per cent inflation then this could be considered a success. This fits with comments previously made by other Japanese officials, suggesting that the central bank may back off early if possible.