New Bank of Japan Gov. Haruhiko Kuroda emphasized that the bank has changed its monetary policy at a press conference to officially announce his appointment.

At the press conference Thursday, Kuroda indicated his intention to implement additional monetary-easing measures, giving the impression that the central bank has put an end to its stance under former Gov. Masaaki Shirakawa.

Kuroda's remarks gave an idea of the future measures to be taken by the bank to achieve its 2 percent inflation target.

"While interest rates have remained near zero, our role to work to fulfill the expectation [of market players that prices will rise] is crucial," Kuroda said.

Regarding the mechanism by which the monetary easing measures aim to revitalize the economy, Kuroda said: "For small and midsize companies, interest rates on bank loans will fall, and for major companies, fund procurement from financial markets will become easier. Economic activities will be stimulated as a consequence."

But he also expressed his view that even if drastic monetary easing is implemented, it is essential that people understand that price levels will rise in the future as the bank tries to achieve the 2 percent inflation target.

Kuroda expects households will spend more, which will make companies increase their capital investment in a kind of chain reaction.

Deputy Gov. Kikuo Iwata also said, "Unless we commit to achieving the target in a responsible manner within about two years, market players will lose trust in our monetary policy."

Kuroda said, "We intend to manage policies in such a way that the direction of our monetary policy will be clearly discernable, which in turn will strengthen communication with markets."

Under the current monetary-easing policy, the central bank has a special fund for purchasing government bonds and other financial products.

It also has a loan scheme to encourage private financial institutions to extend more loans.

In addition, there is an internal rule called the bank notes rule, under which the outstanding government bonds held by the bank should not exceed its outstanding issuance of bank notes.

Some market players found it difficult to understand how seriously the Bank of Japan intends to implement monetary-easing measures due to the complicated natures of the schemes.

"In many countries, central banks are responsible for stabilizing price levels," Kuroda said.

Deputy Gov. Hiroshi Nakaso, who was promoted from within the central bank, also added that the bank's monetary policy in the past "had become difficult to understand," due to the internal schemes.

Under Kuroda, the bank will likely review its comprehensive monetary easing measures, including the bank notes rule, which were adopted under Shirakawa.

The decision to implement the comprehensive easing measures was made in October 2010 because of the rapid rise of the yen's value in the wake of European financial crisis, and as a result of deflation, which was becoming increasingly serious.

The three pillars of the policy were:

-- To effectively revive a zero-interest policy for the first time in four years and three months.

-- To promote monetary-easing measures until a 1 percent year-on-year increase in the consumer price index could be expected.

-- To establish a new fund for purchasing long-term government bonds, corporate bonds and other financial assets.

The central bank will likely purchase government bonds with longer maturity periods than at present, and actively buy financial products with price fluctuation risks, such as real estate investment funds (J-REIT).

At Thursday's press conference, Kuroda said: "It's natural for a central bank to voluntarily purchase government bonds as part of its monetary policy. There is no possibility it will finance government deficits."

As the central bank is going to shift to a policy of drastic monetary-easing, many market players may fear that the bank's government bond purchases are covering the government's fiscal deficit.

Kuroda said, "We have taken action while considering what kinds of bond and asset purchases are proper."

Kuroda emphasized that as long as the central bank purchases such assets based on its own judgment, it does not constitute covering the government's fiscal deficit.