BOJ TO KEEP EASY POLICY, UPBEAT ON INFLATION GOAL
Governor sees Japan economy expanding on higher spending
BANK of Japan (BoJ) governor Haruhiko Kuroda yesterday stressed his resolve to maintain the central bank’s massive stimulus programme, even as he offered an optimistic view on prospects for meeting his two per cent inflation target.
Kuroda said Japan’s economy would continue expanding moderately as rising household income drove up spending.
“With the output gap improving and medium- to long-term inflation expectations seen heightening, we expect inflation to accelerate as a trend and head towards two per cent,” Kuroda told a quarterly meeting of the BoJ’s regional branch managers.
The BoJ would maintain its ultra-loose policy “until needed to stably and sustainably achieve” its target, said Kuroda.
The central bank revised up its assessment for two of Japan’s nine regions in a report and maintained its rosy view for six areas, saying a tightening job market was supporting consumption.
It described the economy as “expanding” or “expanding moderately” for six of the regions in a sign of its confidence over the strenghtening recovery.
Japan’s economy expanded an annualised 1.6 per cent in the October-December quarter, marking the eighth straight quarter of growth, on robust global demand and capital spending.
But core consumer inflation stood at one per cent in February, well below the BoJ’s two per cent target, as slow wage growth keeps consumers from boosting spending.