TOKYO, June 13 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
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
"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
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
"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
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
"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)