The Bank of Japan kept monetary policy steady and took a more upbeat view of the economy on Tuesday, reinforcing market expectations that its future policy direction could be an increase - not a cut - in interest rates.
Following are comments from BOJ Governor Haruhiko Kuroda at his post-meeting news conference:
IMPACT OF YEN FALLS ON INFLATION
"In general, a weak yen directly pushes up prices through a rise in import costs. In the long run, it also affects prices indirectly through (a narrowing of the) output gap and inflation expectations.
We will reflect these market developments and their impact on the economy and price outlook at our next policy meeting. They will be taken into account in our semi-annual outlook report in January."
PROSPECTS FOR SLOWING PURCHASES OF EXCHANGE-TRADED FUNDS
"The BOJ's ETF buying is part of its QQE framework and helps to push down risk premium. It's not aimed at manipulating stock prices to a particular level. Our ETF buying is a necessary step to achieve 2 percent inflation ... As for the outlook, we will take an appropriate action by looking at economic, price and financial developments."
ON TALK BOJ MAY RAISE 10-YEAR BOND YIELD TARGET
"We are still distant from our 2 percent inflation target. It's therefore appropriate to continue with powerful monetary easing."
ON RAISING YIELD TARGET TO STAVE OFF SHARP YEN FALLS
"Monetary policy doesn't target currency rates ... Having said that, current exchange-rate moves can be described more as dollar strengthening rather than yen weakening. Almost every country's currency is weakening against the dollar"
"It's possible the divergence in monetary policy directions could affect currency moves. But for now, I don't see current yen falls as excessive or posing any problem. Current (yen) levels are around the same levels seen in February. They aren't too surprising a level."
(Reporting by Leika Kihara, Stanley White, Tetsushi Kajimoto and Minami Funakoshi; Editing by Shri Navaratnam)