BOJ Confirms Positive Assessment of Economy Despite Weak Data

Bank of Japan Governor Haruhiko Kuroda came out fighting on Friday, giving a spirited defence of the economy’s performance after a run of weak data, and reiterated his readiness to expand stimulus if inflation faltered on the path to his 2 percent target rate.

“The BOJ is not aiming at achieving the price stability target of 2 percent temporarily. What it aims at is to achieve an economy in which inflation is about 2 percent on average year after year,” he said, signalling that the central bank will not exit from its ultra-loose stimulus any time soon.

“I would like to emphasize that…given the BOJ’s clear and strong commitment to the 2 percent inflation target, it is a matter of course the BOJ will make adjustments if necessary to ensure the target is met,” he said at a seminar.

 
He stressed that the BOJ will vigilantly monitor how a decline in real income affects consumer spending.

Kuroda said an increase in summer bonus payments to workers would help consumer spending recover from an increase in the sales tax in April, while labour and supply constraints meant companies were expected to keep raising wages.

“A positive cycle of output, income and expenditure is firmly in place, so we can say Japan’s economy continues to recover moderately as a trend.”

There were signs, he said, that companies were ready to increase domestic investment after holding back spending on plant and equipment during a prolonged period of deflation.

via Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.