April 27 The Bank of Japan kept monetary policy
unchanged on Thursday and offered its most optimistic assessment
of the economy in nine years, signalling its confidence that a
pick-up in overseas demand will help sustain an export-driven
Following are comments from BOJ Governor Haruhiko Kuroda at
his post-meeting news conference:
"We expect inflation to accelerate toward 2 percent but
currently, inflation is around zero percent. Talking about a
specific exit strategy now would cause undue confusion in
markets. That's because an appropriate exit strategy would vary
depending on economic, price and financial situations at the
"It will involve questions like what to do with our interest
rate targets and our expanded balance sheet. What to do with
these would depend on economic and price conditions at the time,
so it's too early to talk about a specific (exit) plan."
"If the time comes we will take appropriate communication
with markets (on an exit strategy)... The prerequisite for such
debate to happen is for inflation to achieve 2 percent."
"Since we adopted our yield curve control, the actual amount
of bond buying has fluctuated from time to time. Sometimes the
pace is above or below the guidance ... But I don't think we are
facing any problems achieving our yield targets while having the
80-trillion-yen guidance in place."
"We expect Japan's economy to expand at a pace quite above
its potential in fiscal 2017 and 2018. If so, it's natural to
believe that this will lead to an improvement in the output gap,
tighten labour market conditions, thereby pushing up wages and
"Given how the labour market is tightening, wages are likely
to rise. Prices, on the other hand, are affected by various
factors particularly long-term inflation expectations, which
remain on a weak note... Overall, inflation expectations haven't
shown clear signs of a pick-up. They have bottomed out but
haven't rebounded yet, so we need to look at developments
"I don't think labour shortages and supply constraints will
hamper economic growth. There may be some impact on individual
companies. But when the job market is tight, wages go up and
companies boost investment (for automation)."
"The board's median forecast is for inflation to reach 2
percent around fiscal 2018. But it will probably be later than
that for inflation to stably move around 2 percent."
(Reporting by Leika Kihara, Stanley White and Tetsushi