BoJ Governor: Japan is Steadily Moving Towards Deflation End
Governor of the Bank of Japan Haruhiko Kuroda said that the central bank will maintain its ultra-free monetary policy until the inflation target is reached. The politician stressed that the exit from the incentive program in any case will be smooth and gradual. It is forecast, that inflation will reach the 2% target during the fiscal year ending in March 2020. According to Kuroda, Japan is steadily moving towards an exit from deflation.
The economy of Japan is steadily recovering due to strong global demand, which underpins corporate profits. But the core inflation was 0.9% in January, which is much lower than the goal of the Central Bank of Japan.
The politician also said that the rate increase will be very gradual. The Central Bank of Japan expectedly kept the interest rate at a negative level -0.1% at the last meeting in January. Haruhiko Kuroda, speaking in Parliament last week, 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.