BOJ Kuroda: Japan Far From 2% CPI, to Continue Easy policy

     OSAKA, Japan (MNI) - Bank of Japan Governor Haruhiko Kuroda repeated the

central bank's mantra Monday that the economy is still far from reaching the

bank's 2% inflation target, which requires continued large-scale monetary

stimulus.

     In a speech to business leaders in Osaka City, western Japan, Kuroda said,

"Central banks in major economies are currently conducting monetary policy with

the aim of achieving around 2% inflation."

     "Given this, the Bank of Japan's monetary policy, which is being conducted

with the aim of achieving 2% inflation, is also likely to contribute to stable

foreign exchange rates in the long run."

     BOJ officials believe that if Japan were to lower its inflation target from

the 2% Kuroda sees as a global standard, it would raise the notion that the BOJ

would not need to provide so much monetary stimulus, which could cause an

unwanted rise in the yen while Japan is still struggling to turn around the

deflationary mindset prevalent among consumers and businesses.

     "Although there is still a long way to go to achieve the price stability

target of 2%, the BOJ will continue to persistently pursue powerful monetary

easing with a view to achieving the target at the earliest possible time," he

said.

     Kuroda stressed the need for the BOJ to maintain its 2% inflation target,

noting there is an upward bias in price statistics and the economy needs a

safety margin to avoid slipping back into deflation.

     At its previous policy meeting on Sept. 20-21, the BOJ board decided in an

8-to1 vote to maintain its current monetary easing stance under the yield curve

control framework it adopted about a year ago.

     One of the two new board members, Goushi Kataoka, dissented, arguing

current policy was insufficient to meet the central bank's 2% policy goal by the

current target date of sometime in fiscal 2019, according to the BOJ's policy

statement following its meeting. Kataoka didn't make any counter-proposal.

     In July, the BOJ pushed back the timeframe for hitting the 2% inflation

target to "around fiscal 2019" from the previous estimate of "around fiscal

2018." It was the sixth delay since the bank began aggressive easing in April

2013.

     Kataoka also opposed the description of the board's inflation outlook.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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