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TOKYO (Reuters) - Bank of Japan Governor Haruhiko Kuroda on Friday stressed that financial markets will likely stabilize over time, reflecting improvements in Japan's economy.
But Kuroda warned that uncertainty surrounding the world's third-largest economy remains high, and that the central bank will carefully watch market developments.
"Japan's economy is likely to resume a moderate recovery as overseas growth picks up moderately and domestic demand remains resilient due to the effect of monetary easing and various stimulus measures," Kuroda said at a conference in Tokyo.
"We will make policy adjustments as needed, examining both upside and downside risks to the economy and prices," he said.
The BOJ stunned markets in April by unleashing the world's most intense burst of monetary stimulus, promising to inject $1.4 trillion into the economy in less than two years to meet its pledge of achieving 2 percent inflation in roughly two years. It has kept policy on hold since then, despite the recent market volatility.
(Reporting by Leika Kihara; Editing by Shinichi Saoshiro)