Bank of Japan Governor Haruhiko Kuroda voiced confidence on Tuesday that the economies of China and the U.S., Japan’s two big export markets, will continue to recover and help achieve the central bank’s 2 percent inflation target.
Kuroda said the world’s third-largest economy was making steady progress toward meeting the BOJ’s price goal, but reiterated his readiness to offer additional monetary stimulus if that path is threatened by external risks.
“We are ready to take appropriate policy adjustments without hesitation if either upside or downside risks materialize,” he told business leaders in Osaka, western Japan.
Kuroda brushed aside the view, held by some pessimists in the market, that exports may not increase enough in time to make up for an expected downturn in household spending when Japan raises its sales tax in April 2014.
“U.S. and Chinese economies, which are important in terms of the impact on Japan’s economy, will continue to recover… albeit some risks remain,” he said.
China is promoting structural reforms that may slow growth but the country’s policymakers will likely take appropriate action to stimulate the economy if necessary, Kuroda added.
The BOJ has kept monetary policy steady since delivering an intense burst of stimulus in April, under which it pledged to double base money via aggressive asset purchases to accelerate inflation to 2 percent in roughly two years.