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TOKYO (MNI) - Bank of Japan Governor Haruhiko Kuroda Thursday repeated his
optimistic view on the outlook for the economy and inflation rate at the central
bank's quarterly branch managers' meeting.
The key points of Kuroda's remarks:
--"The year-on-year rate of change in the CPI (all items less fresh food)
is likely to continue on an uptrend and increase toward 2.0%, due mainly to an
improvement in the output gap and a rise in medium-to-long term inflation
expectations." The latest data showed that Japan's core CPI rose 1.0% y/y in
February, which is slow to respond to a sustained economic growth and still far
from the BOJ's 2% target.
--The governor didn't say when the BOJ is likely to anchor inflation rate
to around 2.0%. That said, the board's latest view, presented in March, is that
Japan can hit the 2.0% price target "around fiscal 2019". The BOJ board will
update its medium-term growth and inflation outlook at its April 26-27
--"The economy is expanding moderately, with a virtuous cycle from income
to spending working," and it is likely to continue its moderate expansion.
--As for the conduct of monetary policy, Kuroda said the BOJ will maintain
its monetary easing under the yield curve control framework adopted in September
2016 for as long as it is necessary to lift inflation to 2.0% and anchor it
around that level.
--"The BOJ will continue expanding the monetary base until the year-on-year
rate of increase in the observed CPI (all items less fresh food) exceeds 2.0%
and stays above the target in a stable manner," Kuroda said.
--The BOJ will make policy adjustments as appropriate, taking account of
developments in economic activity and prices as well as financial conditions,
with a view to maintaining the momentum toward achieving the price stability
target. However, he did not elaborate further on how and when policy would be
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