Kuroda Stresses Speed Important in Achieving 2 Percent Inflation Target

The Japan government’s choice to lead the country’s central bank promised on Monday to move quickly to implement fresh monetary stimulus to lift the struggling economy, a case underlined by a surprisingly sharp drop in a gauge of capital investment.

Declaring that “speed is important”, Haruhiko Kuroda said he would do what ever it takes to hit the Bank of Japan’s inflation target of 2 percent – even though the economy has rarely seen that level of inflation since the early 1990s.

“I want to debate policy steps with the monetary policy committee and implement these steps as soon as possible,” he told lawmakers in an upper house confirmation hearing.

Kuroda is expected to be approved by parliament later this week because opposition parties, whose support is needed in the upper house, have indicated they would back him.

Supporters of the more aggressive monetary policy advocated by Prime Minister Shinzo Abe can point to a 13.1 percent drop in core machinery orders in January from December as highlighting the need for urgent action.

Analysts and government officials suggested the much weaker than expected figures were a blip in a typically volatile data series, but they did show companies remained cautious in their spending plans. Analysts had expected a fall of just 2 percent.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza