BOJ Governor Kuroda's comments at a news conference

 

The Bank of Japan upgraded its inflation forecasts on Tuesday and flagged heightening chances the recent commodity-driven price hikes will broaden, the latest sign of its conviction Japan is emerging sustainably out of deflation.

The central bank also revised up next fiscal year's growth forecast and offered a more upbeat view on the economy than three months ago, taking in stride the recent spike in Omicron coronavirus variant cases at least for the time being.

As widely expected, the BOJ left unchanged a -0.1per cent target for short-term interest rates and a pledge to guide long-term rates around 0per cent at a two-day meeting that ended on Tuesday.

Following are excerpts from BOJ Governor Haruhiko Kuroda's comments at his post-meeting news conference, which was conducted in Japanese, as translated by Reuters:

MONETARY EASING

"Consumer inflation is likely to stay around 1per cent through the end of the BOJ's projection period. As such, there is no need to modify the BOJ's monetary easing." 

INFLATIONARY PRESSURE

"Japan has recently seen inflationary pressure heighten. This is driven partly by an improving output gap, reflecting a pickup in Japan's economy. When you look at Japan's past experience, such as in 2018, price gains driven by rising commodity costs had been temporary."

SUSTAINABLE INFLATION

"For inflation to become sustainable, we need to see an increase in medium- to long-term inflation expectations."