Bank of Japan Governor Haruhiko Kuroda said Friday doubts among market participants about the central bank’s commitment to raising prices have been addressed by its surprise monetary easing in October, indicating no rush toward further action.
In a speech, Kuroda repeated the bank will not hesitate to adjust policy if necessary but underscored it will not focus solely on falling crude oil prices and will rather pay attention to how they sway people’s inflation expectations.
The BOJ’s “determination may have been questioned earlier. In any case, however, I believe such doubt was cleared after the easing,” Kuroda told a luncheon at the Japan National Press Club.
The BOJ expanded its monetary stimulus in October, further driving the yen lower and stocks higher. The move was intended to prevent the sharp fall of oil prices and a subsequent slowdown in consumer price rises from undermining inflation expectations among the public.
Even as oil prices continued to slide, the BOJ stood pat in following policy meetings, most recently last week when Kuroda told reporters he sees no immediate need to ease policy further, given no sign the overall price trend is changing.
“Crude oil prices have been declining further even after October last year, but conversion of the deflationary mindset is proceeding steadily,” he said.
Kuroda’s apparent reservation of additional easing comes despite government data released earlier in the day showing Japan’s year-on-year core consumer price index slowed further to 0.2 percent last month, after excluding the effects of last April’s consumption tax hike.