HIGHLIGHTS-BOJ Governor Kuroda comments at news conference
TOKYO, June 13
TOKYO, June 13 (Reuters) - The Bank of Japan kept monetary policy steady on Friday and offered a slightly more upbeat view on overseas growth, signalling confidence the economy is on course to meet its inflation target next year without additional stimulus.
Following are comments from BOJ Governor Haruhiko Kuroda at his post-meeting news conference:
ON JAPAN'S ECONOMY:
"The economy is moving roughly within our expectations. Household spending remains solid as a trend ... The positive cycle of the economy is firmly in place, accompanied by clear improvements in job conditions and income."
"We expect Japan's economy to temporarily contract in the second quarter (due to the sales tax hike impact). But more companies have decided to raise regular pay and summer bonuses are set to rise, so job and income conditions will continue to clearly improve.
"As such, we expect household spending to remain firm. The downturn in spending (in reaction to the rise ahead of the tax hike) will ease from around summer."
"While the economy is seen contracting in the second quarter, it is likely to steadily continue a moderate recovery driven mainly by domestic demand. I don't think the recovery lacks balance. One thing, though, is that exports have been somewhat weaker than what most people had expected, so we need to look at developments carefully."
"There's a chance the timing of an export recovery has been delayed somewhat. But I don't think exports as a whole will fail to recover."
ON PRICE TARGET, QQE PROGRAMME
"We're always closely watching price developments ... We are only halfway through (reaching) our price target, so we'll steadily proceed with our QQE programme."
"QQE is an open-ended programme so there's no pre-set date on how long it will last ... We won't end QQE in 2015 before 2 percent inflation is achieved or before such price growth is achieved in a sustained manner."
ON PRICE FORECAST OF BOARD MEMBERS AND MONETARY POLICY OUTLOOK:
"There are some differences (in the board members' forecasts) but I think we broadly agree that the Bank of Japan won't hesitate to adjust policy if upward or downward risks force us to alter our projections."
ON GOVT'S GROWTH STRATEGY:
"I understand that the government is accelerating implementation of its existing strategy and, after various discussions, crafting a new one. The Bank of Japan strongly hopes there is steady progress on these fronts."
ON ECB'S POLICY PACKAGE
"It's true inflation in the euro zone has been below 1 percent for more than six months and the output gap will weigh on inflation ahead. But the ECB has stressed that medium- and long-term inflation expectations are well anchored and is strongly committed to ensuring it stays that way.
"I think the latest package shows that determination. Given the region's economy is recovering moderately, I think the risk of the euro zone area as a whole slipping into deflation is small."
ON IMPACT OF ECB EASING MEASURES ON EURO/YEN EXCHANGE RATE:
"Japan is steadily moving towards the 2 percent price target but we're still halfway there. We also plan to continue QQE until 2 percent inflation is stably achieved. I therefore think there's no reason for the yen to strengthen much against the euro."
"I don't think there is a reason for the yen to strengthen against the euro from the ECB's stimulus package, including negative interest rates." (Reporting by Leika Kihara, Stanley White and Tetsushi Kajimoto; Editing by Chris Gallagher)
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