(MENAFN- Qatar News Agency) Bank of Japan Governor Haruhiko Kuroda indicated the central bank will keep intact its current monetary easing policy in 2014 with prospects that the country's economy continues to recover despite possible adverse impact from a sales tax hike in April. In a recent interview with Japan's (Kyodo) News Agency, the BOJ chief apparently played down a view in financial markets that the bank is likely to further ease its monetary policy as early as the first half of 2014.
"As long as the economy moves as expected, we will continue with the current policy," he said. Regarding a possibility of additional easing, Kuroda said, "We will make adjustments as appropriate to achieve the price stability target" by examining economic data each month. "Basically, I believe that the economy will grow steadily" despite some up and down swings generated by last-minute and weakened demands before and after the tax hike, Kuroda said, referring to the BOJ's forecast of a 1.5% growth in the real economy in fiscal 2014 starting in April.
Kuroda said present situations differ considerably when compared with 1997, when the consumption tax was increased for the first time, to the current 5% from 3%, as Japan's financial institutions are now robust and emerging economies are experiencing relatively high growth although the pace has slowed to some extent. Kuroda noted that growth in Japan's exports has been weaker than projected in April 2013, when the BOJ introduced large-scale monetary easing steps, as European and emerging economies have been weak.
But they are likely to recover gradually due to improvement in the global economy, which is expected to grow at a faster pace led by the United States and Europe, he added. To beat deflation, the BOJ vowed in April 2013 to attain an inflation target of 2% in about two years with its monetary easing steps centering on doubling the monetary base and purchases of government bonds.
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