Bank of Japan's Fukui says will cautiously assess risk before new policy action

Bank of Japan governor Toshihiko Fukui said the central bank will cautiously monitor all kinds of risks before taking further policy actions in its current credit-tightening cycle.
"From here on, we remain forward-looking. We will expand our horizon and proceed our policy after checking all kinds of possibilities and risks," he told reporters on arrival in Singapore to attend the annual meetings of the International Monetary Fund and the World Bank.
Fukui said his cautious stance reflected the complex effect of high energy costs.
The Band of Japan made its first rate hike in six years in July by raising the target for the overnight call rate -- interest commercial banks charge each other for short-term needs -- to 0.25 pct from near zero.
Fukui said the subjects of discussions on exchange rates among top Group of Seven financial policymakers have expanded from mere one-to-one currency rates due to globalization and more complicated capital flows.
"Foreign exchange rates reflect the results of overall economic activities and flows of funds more than before, therefore there is no point in considering 'a priori' what appropriate exchange rates are like," he said.
Fukui will also join other G7 finance ministers and central bank governors tomorrow to compare notes on global economic and financial issues. He said last week currencies will not be a big issue at the meeting although European officials have suggested the yen may be discussed.