* Japan making headway in meeting price goal-Kuroda
* Economy recovering, which will push up prices-Kuroda
* Govt to cut economic view in report-Nikkei (Adds more Kuroda quotes, poll on BOJ action timing)
By Leika Kihara
TOKYO, April 16 (Reuters) - Bank of Japan Governor Haruhiko Kuroda on Wednesday affirmed the central bank’s upbeat view of the economy, even as global financial markets wobble, stressing that growth will pick up around mid-year as the sting of a sales tax hike fades.
Price rises will broaden as the economy continues to improve gradually, Kuroda added, reiterating his view that Japan is making headway towards the central bank’s price goal of 2 percent inflation in about a year’s time.
“It’s true (the tankan survey published earlier this month) showed a wide range of companies, especially among auto makers and retailers, holding a more cautious view about the economic outlook,” Kuroda told a parliamentary session.
“But the level (of confidence) remains high and corporate capital spending plans for fiscal 2014/15 is solid. Companies’ positive stance is maintained,” he said.
The comments came a day after Kuroda met with Prime Minister Shinzo Abe to discuss the economy, which drew some market speculation the BOJ may come under pressure to expand stimulus as a rebound in the yen and sliding Japanese share prices cloud the outlook for the world’s third-largest economy.
Kuroda attempted to quash this speculation, telling reporters after the meeting that the premier did not ask him to take further measures to end deflation.
He also appeared unfazed by the recent fall in stock prices, telling parliament on Wednesday that while he was watching market developments carefully, he did not see any speculative moves that were hurting the economy in a significant way.
Kuroda’s bullish views on prices have wiped out expectations of an imminent expansion of stimulus. The latest Reuters poll showed a growing consensus building in the market that the BOJ will probably not ease until July, with no respondent predicting action at the next rate review on April 30.
BOJ officials have repeatedly expressed confidence that this month’s increase in the national sales tax will not derail the economy or prevent inflation from hitting the central bank’s 2 percent target.
But many economists and traders say the BOJ will have to ease policy again this year as consumer price gains are likely to stall. The BOJ has had trouble bridging this gap in perception about future policy moves.
In contrast to the BOJ’s optimism, the government is set to revise its assessment of the economy because of the effect of the tax hike when it publishes a monthly report due soon, the Nikkei business daily reported.
Kuroda stressed that the economy will weaken in April-June due to the tax hike’s impact but will return to growth above its potential, seen as around 0.5 percent, thereafter as job and income conditions improve.
Despite the upbeat language, the BOJ is hardly complacent and mindful of the impact market moves have on business and household sentiment -- key to success of its stimulus programme.
Exports have failed to bounce back despite the competitive advantage Japanese goods have enjoyed from a weak yen, casting doubt on whether they will recover in time to take up the slack from the slump in consumption after the tax hike.
Kuroda therefore stressed that Japan was only half-way towards meeting the BOJ price target - a view he has recently started to emphasise - possibly to keep alive market expectations that the central bank is ready to act if the economy falters.
“For now, what’s important is to do our best toward meeting our 2 percent price target at the earliest date possible,” Kuroda said.
The BOJ next meets for a policy review on April 30, when it will also release new long-term economic and price projections set to show Japan will record sustained inflation of around 2 percent for at least two years from mid-2015.
Japan’s core consumer prices rose 1.3 percent in February from a year earlier, increasing for the ninth straight month, as the weak yen increased import costs.
Analysts are less optimistic than the BOJ on the price outlook, with the Reuters poll showing they predict inflation to peak around May and stagnate around to 1 percent for the next two years.
The poll also showed analysts expect Japan’s economy to contract 0.9 percent this quarter due to the tax hike but rebound 0.5 percent in July-September. (Reporting by Leika Kihara; Editing by Dominic Lau and Eric Meijer)