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Bank of Japan Governor Haruhiko Kuroda said Wednesday that while inflation is on a more positive upward trend it will take three years to reach a 2% target.

Unlike in earlier periods, "price cuts aimed at stimulating demand have not been widely observed" even despite the weakness related to Covid-19, he said. "This shows that underlying inflation has been steady."

"On the surface yes, the inflation rate in Japan is still low compared with inflation rates in Europe and the U.S., but the underlying trend is somewhat more positive, and we expect that the inflation rate will steadily go up and eventually reach" 2% inflation, he told a conference in Montreal via webcast.

"We still think that the inflation rate in 2023 will be less than 2%," he said. "Probably we need slightly more than three years to reach the 2% inflation target." Kuroda also affirmed the BOJ would do more if needed to keep inflation on track.