March 9, 2018 / 6:43 AM / in 3 months

HIGHLIGHTS-BOJ Governor Kuroda comments at news conference

TOKYO, March 9 (Reuters) - Japan’s central bank kept policy unchanged on Friday and stuck to its upbeat view on the economy, underscoring its conviction that its massive stimulus programme is helping drive inflation towards its elusive target.

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

EXIT TIMING

“In our quarterly forecast issued in January, the BOJ board forecast inflation to reach 2 percent during fiscal 2019. But we’ve also said there was high uncertainty to the price and inflation expectation outlook. Even if our price goal is met during fiscal 2019, that doesn’t mean we will immediately exit ultra-easy policy.

“We will only begin discussing and examining when and how we could exit easy policy. There is still some distance from our price target, so we’re not in a stage now to discuss specifics of an exit strategy.”

“If the economy loses momentum to achieve our price target, we would of course consider easing policy further.”

“Theoretically that’s (raising yield target to fine-tune monetary easing) possible but I’m not thinking of doing so now. Our policy aims to strengthen the degree of monetary easing by maintaining yields low even as inflation expectations heighten. We have absolutely no plan of doing so now.”

“It’s true you can’t take policy steps recklessly ... it’s not productive to set in advance limits to how much you can buy bonds, or how much you can cut rates, without considering the economic implications of such steps. It’s important to compare the cost performance of each step with other steps that are available. Just saying you can’t do this or that is not constructive.”

PRICE EXPECTATIONS

“Companies’ price-setting stance is likely to become more positive. Inflation expectations have emerged from weaknesses and seen heightening steadily. The economy is sustaining its momentum to achieve the BOJ’s price target.”

MARKET VOLATILITY

“Uncertainty over U.S. trade policy may be among factors behind the volatility. But economic fundamentals remain favourable and corporate profits, which are foundations of stock price moves, continue to be firm.”

“The impact of market volatility on the economy remains limited for now. But we’ll closely watch how domestic and overseas market moves could affect Japan’s economy and prices.”

“G7, G20, WTO, IMF - the international community all share an understanding of the need for free trade. Protectionism has demerits to the country that imposes it, so I don’t think it will spread globally. But each country’s trade policy could affect global growth and financial markets, so we need to carefully watch developments.” (Reporting by Leika Kihara, Stanley White and Tetsushi Kajimoto; Editing by Sam Holmes and Himani Sarkar)

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