BOJ Governor Reaffirms 2% Inflation Vow

Bank of Japan (BOJ) Gov. Haruhiko Kuroda said the central bank will maintain its target of ensuring 2 percent inflation around fiscal 2015 and take necessary steps if it strays from the path to the goal.

“We will not be able to achieve (the target) if we take the stance to ease our commitments when it becomes difficult to achieve the price stability target,” Kuroda told the Mainichi Shimbun in an interview. He said the central bank will make “necessary adjustments” if it deviates from the path toward the 2 percent inflation target. He implied that the central bank could move ahead to ease monetary policy one more notch with an eye to employing new techniques, saying, “There are plenty of ways to do this.”

Kuroda said the criteria for determining whether the central bank has achieved the target include whether the consumer price index (CPI) and the expected price increase rate envisioned by consumers and businesses will stabilize at an annual rate of 2 percent. But many experts think it is difficult to achieve the 2 percent target within a year or two due to declining oil prices and a slow recovery in consumption, and therefore the BOJ could come under increased pressure to ease monetary policy further.

via Mainichi

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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