Bank of Japan Will Consider Curtailing of Incentive Measures in 2019 Fiscal Year

Forex News

The Governor of the Bank of Japan, Haruhiko Kuroda, said he do not rule out the possibility of further softening of the policy if it is necessary to maintain the momentum of inflation. At present, the Bank of Japan predicts that inflation will reach 2% by March 2020. Kuroda stressed the determination of the Bank of Japan to maintain its large-scale incentive program at the moment, as inflation is removed from its 2-percent target.

Haruhiko Kuroda, speaking in Parliament, said that the Bank of Japan will begin to consider winding up the exit strategy in the fiscal year 2019, which will begin on April 1, 2019. Under a policy adopted in 2016, the BoJ guides short-term interest rates at -0.1% and the 10-year government bond yield around zero percent. The Japanese yen rose to a maximum in 15 months against the US dollar on the statements of the head of the Central Bank, adding 0.5%. The stock index Nikkei 225 on Friday fell by 2.5%.

Unemployment in Japan fell to 2.4% in January, the lowest level since April 1993, according to official data. The figure was 2.7% in December. The head of the Bank of Japan Haruhiko Kuroda has repeatedly stated that the changing situation in the labor market should contribute to the growth of wages, increased costs and inflation.