BOJ’s Kuroda maintains positive view on economy

FE Team | Published: April 17, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

TOKYO, Apr 16 (Reuters): Bank of Japan Governor Haruhiko Kuroda on Wednesday affirmed the central bank's upbeat view of the economy, even as global financial markets wobble, stressing that growth will pick up around mid-year as the sting of a sales tax hike fades.
Price rises will broaden as the economy continues to improve gradually, Kuroda added, reiterating his view that Japan is making headway towards the central bank's price goal of 2 per cent inflation in about a year's time.
"It's true (the tankan survey published earlier this month) showed a wide range of companies, especially among auto makers and retailers, holding a more cautious view about the economic outlook," Kuroda told a parliamentary session.
"But the level (of confidence) remains high and corporate capital spending plans for fiscal 2014/15 is solid. Companies' positive stance is maintained," he said.
The comments came a day after Kuroda met with Prime Minister Shinzo Abe to discuss the economy, which drew some market speculation the BOJ may come under pressure to expand stimulus as a rebound in the yen and sliding Japanese share prices cloud the outlook for the world's third-largest economy.
Kuroda attempted to quash this speculation, telling reporters after the meeting that the premier did not ask him to take further measures to end deflation.
He also appeared unfazed by the recent fall in stock prices, telling parliament on Wednesday that while he was watching market developments carefully, he did not see any speculative moves that were hurting the economy in a significant way.
Kuroda's bullish views on prices have wiped out expectations of an imminent expansion of stimulus. The latest Reuters poll showed a growing consensus building in the market that the BOJ will probably not ease until July, with no respondent predicting action at the next rate review on April 30.
BOJ officials have repeatedly expressed confidence that this month's increase in the national sales tax will not derail the economy or prevent inflation from hitting the central bank's 2 per cent target.
But many economists and traders say the BOJ will have to ease policy again this year as consumer price gains are likely to stall. The BOJ has had trouble bridging this gap in perception about future policy moves.
In contrast to the BOJ's optimism, the government is set to revise its assessment of the economy because of the effect of the tax hike when it publishes a monthly report due soon, the Nikkei business daily reported.