Japan Central Bank Optimistic About Reaching Inflation Target

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.

via Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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