April 27, 2017 / 6:48 AM / 4 months ago

HIGHLIGHTS-BOJ Governor Kuroda comments at news conference

April 27 (Reuters) - 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 recovery.

Following are comments from BOJ Governor Haruhiko Kuroda at his post-meeting news conference:

EXIT STRATEGY

"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 time."

"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."

BOND PURCHASES

"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."

OUTLOOK

"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 inflation."

LABOUR CRUNCH

"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 carefully."

"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)."

INFLATION

"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 Kajimoto)

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