BOJ’s Kuroda: ‘Wage and prices would start to accelerate in coming months and years’

CNBC reports headlines from the BOJ Governor Kuroda, as he speaks on the sidelines of the 2017 Asian Development Bank (ADB) meeting in Japan.

Headlines:

1.5 percent is not great, but in Japan it is well above medium-term potential growth rate

Meaning the output gap continues to shrink and becoming positive

And the labor market continues to tighten so that wages and prices would eventually rise to achieve the 2 percent inflation target around fiscal 2018

"Yield curve control has been functioning quite well

And of course if this is around 0 percent 10-year [Japanese Government Bond] target could or should be changed - of course every monetary policy committee meeting, the policy board would discuss and decide whether it should be adjusted upward or downward"

"But I feel that since the economy is likely to grow at around 1.5 percent, and wage and prices would start to accelerate in coming months and years, I think we should, for the time being, maintain this around 0 percent operational target."

Expects the annual spring wages negotiations to result in a base pay increase similar to last year's

The deal-making between businesses and labor tends to "forecast past the 12 month inflation rate, to settle the wage increase or pay rise"