BOJ’s Kuroda: Must maintain low rates for long period to meet price target

The Bank of Japan (BOJ) Governor Haruhiko Kuroda was on the wires last minutes, via Reuters, making the following comments on the monetary policy and inflation outlook.

“Must maintain low rates for long period to meet price target.

Many central banks facing challenge of achieving price targets with less scope for policy response.

BOJ board members agreed at last month’s meeting that economic price uncertainties are high will take time to hit price target.

BOJ’s current forward guidance is framework in which BOJ will deduce policy based on data, information, available at the time.

BOJ projects economic price developments to warrant current low rates at least until spring 2020.

There is good chance BOJ will keep current low rates beyond spring 2020 if conditions warrant.

Price momentum is being maintained.

Inflation will pick up gradually towards 2% goal.

Price goal will take more time amid uncertainties japan exports declining, leading to weakening of output, manufacturers sentiment.

Weakness in overseas economy yet to spread to Japan’s domestic demand.

Japan’s economy is more resilient to external shocks.

BOJ does not expect overseas economy to worsen further.

Vital to constantly examine risks without preconception.

Japan’s economy sustaining momentum for inflation to reach 2%.

Japan firms may become more cautious on capex if overseas growth takes longer than expected to pick up.

When we say we will keep low rates for ‘extended period’ of time we are thinking of quite a long time.”