TOKYO (Reuters) - Japan’s central bank kept monetary policy steady on Friday but ditched a timeframe it had set for hitting an inflation target, a surprise move analysts say is aimed at keeping market expectations for more stimulus in check.
Following are comments from BOJ Governor Haruhiko Kuroda at his post-meeting news conference:
“Companies’ wage and price-setting behavior remains cautious. When stripping away the effect of energy price moves, inflation remains on a weak note despite the economy’s expansion and the narrowing output gap.
“There’s no change to our view, formed three months ago, that inflation will likely reach 2 percent during fiscal 2019.”
“There’s no change to our commitment to achieve 2 percent inflation at the earliest date possible.”
ON WHY THE BOJ REMOVED THE TIMEFRAME FOR HITTING ITS PRICE GOAL:
“The timeframe was always a forecast, not a binding deadline for meeting our goal. But some market players interpreted the timeframe was a deadline and tied it with monetary policy action.
“In reality, it’s taking time to achieve 2 percent inflation and there are various uncertainties to the price outlook. It’s inappropriate for markets to focus too much on the timeframe.
“If the economy loses momentum for achieving 2 percent inflation, we’ll undoubtedly consider easing policy ... We removed the timeframe to arrest market misunderstanding that the timeframe is directly linked to monetary policy.”
Reporting by Leika Kihara; Editing by Eric Meijer