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Bank of Japan Governor Haruhiko Kuroda said on Wednesday that Japan's economy is expected to show weakness due to the higher rate of infections and slow vaccine rollout but will move toward a recovery, supported by solid overseas demand, accommodative financial conditions and the government's stimulus measures.
Kuroda told business leaders in Tokyo that in-person services and travelling will recover if the vaccine rollout expands. The BOJ considers that the economy will not fall into deflation again but the bank must keep a close eye on price moves, including firms' price-setting behaviour, amid the downside risks, he added.
Kuroda also said that the BOJ will not change the 2% price target, which is aligned with the target of major central banks and which helps stabilise international financial markets, including foreign exchange markets.