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Bank of Japan's Kuroda says expectations of higher prices evident

Published 05/15/2015, 12:47 AM
Updated 05/15/2015, 12:50 AM
© Reuters. BoJ's Kuroda sees inflation expectations evident

Investing.com - Bank of Japan Governor Haruhiko Kuroda Friday repeated that there is "no need" to expand the already massive monetary easing at this point as expectations of higher prices are evident.

"During the past two years, QQE - in tandem with the government's policy measures - has markedly changed people's negative mindset, which had taken root under deflation."

But he quickly added that the bank will take necessary action "without hesitation" if it detects a shift in the underlying price trend that could undermine the path toward anchoring 2% inflation at the earliest possible time.

In a speech, Kuroda said the mechanism of his two-year-old aggressive monetary easing is working in the bigger picture despite an unexpected slump in energy prices and a slow recovery in consumption.

"This was attributed to the effects of the decline in demand following the consumption tax hike being somewhat prolonged, as well as to other factors, such as the effects of the bad weather last summer," he said.

Japan started an aggressive monetary easing in April 2013 to reach sustained inflation by April of this year. The goal has not been met, though in October last year the central bank expanded the scope of government bond buying to ¥80 trillion yen annually.



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