Emerging economies have high growth potential, even though the ongoing slowdown in these economies has become protracted, Bank of Japan Deputy Governor Hirohide Yamaguchi said Monday.

Speaking at the annual conference of Securities Analysts Association of Japan, he said that these economies have "high growth potential in the medium to long term" and, on the financial front, "it is likely that especially Asian securities markets will expand substantially."

To strengthen Japan's growth potential, firms should tap new potential demand associated with progress in aging and to incorporate expanding global demand, mainly that of Asian economies, Yamaguchi said.

"Encouraging firms' attempts and unlocking their growth potential will promote business fixed investment and research and development, expand employment, raise wages, and, through an increase in interest and dividend as well as capital gain, strengthen households' income and asset formation," the policymaker added.

Meanwhile, in a keynote address at a seminar co-hosted by BoJ Japan and the International Monetary Fund in Tokyo on Sunday, BoJ Governor Masaaki Shirakawa said that the coordinated provision of liquidity by central banks in times of emergency plays an important role in maintaining financial stability.

To solve the issue of public goods, he said some of them, such as effective supervision of globally important financial institutions, could be provided at the national level while supranational institutions could be asked to take on specific tasks, such as monitoring global financial developments, Shirakawa said at the event.

RTTNews