Bank of Japan Governor Haruhiko Kuroda acknowledged that recent data has painted a patchy picture of the economic recovery but stressed that conditions were falling into place for inflation to head toward his ambitious 2 percent target.
He said the timing for hitting the target may be swayed by oil price moves, suggesting the BOJ won’t expand stimulus if any delay in achieving the goal is due primarily to slumping oil costs.
“It’s unavoidable for our inflation forecasts to fluctuate depending on oil price developments,” Kuroda told parliament on Friday.
With a policy-setting meeting looming next week, Kuroda offered few clues on whether and when the BOJ might next ease monetary policy.
But he ruled out one step considered by markets as a possible policy option, which is to cut a 0.1 percent floor the central bank sets on money market rates.
“We’re not considering cutting or abandoning” the 0.1 percent interest the BOJ pays on excess reserves financial institutions park with the central bank, he said.