NAGOYA, Japan?Bank of Japan Gov. Haruhiko Kuroda on Monday expressed mixed feelings about the rise of Donald Trump, saying the U.S. president-elect may help lift American growth but could deal Japan's economy a blow by scrapping a trade deal.
"Big benefits that could otherwise have been obtained may be lost" if Mr. Trump acts on his campaign promise to scrap the 12-nation Trans-Pacific Partnership, Mr. Kuroda said at a news conference in the central Japanese city of Nagoya.
But the Japanese central bank chief said financial markets were in a "quite welcoming mode" toward the Republican's unexpected victory, pointing to recent sharp gains in the dollar and U.S. stocks. Mr. Kuroda also sounded optimistic about Mr. Trump's promises to cut red tape for banks and increase government spending on infrastructure.
"I basically think that those measures will help the U.S. economy expand," Mr. Kuroda said. With both houses of Congress and the presidency now under Republican control, "I am hoping that, under these circumstances, [U.S. policy makers] will handle economic policy in an appropriate manner so it will have favorable effects on the world and U.S. economies," he said.
The remarks by Mr. Kuroda reflect a mixture of qualms and hopes among Tokyo officials about the coming U.S. administration.
Prime Minister Shinzo Abe has pushed the sweeping TPP trade deal to boost Japan's diminishing growth prospects. Mr. Abe told parliament on Monday he doesn't believe the TPP is dead, although Republicans and Democrats have agreed it won't be taken up during the remainder of President Barack Obama's administration.
On the plus side for Japan, expectations that Mr. Trump will stimulate the U.S. economy have helped strengthen the dollar against the yen, lifting Japanese exporters. Tokyo had worried before the election that a Trump victory would have the opposite impact on currencies.
Mr. Kuroda took a sanguine view of two of Mr. Trump's signature policies--cracking down on immigration from Mexico and taking a tougher stance on trade with China. "Rather than causing a direct effect on the Japanese economy, the effect, if any, would be indirect," he said.
Write to Takashi Nakamichi at email@example.com
(END) Dow Jones Newswires
November 14, 2016 04:55 ET (09:55 GMT)
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