June 15, 2018 / 6:47 AM / 6 months ago

BOJ Governor Kuroda's comments at news conference

TOKYO (Reuters) - The Bank of Japan maintained its ultra-loose monetary policy on Friday and downgraded its view on inflation in a fresh blow to its long-held 2 percent price goal, further complicating the central bank’s path to rolling back its crisis-era stimulus.

FILE PHOTO: Bank of Japan Governor Haruhiko Kuroda attends a news conference in Tokyo, Japan, April 9, 2018. REUTERS/Kim Kyung-Hoon

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

PRICE MOVES

“It’s true year-on-year growth in consumer prices is slowing. This is partly due to falling durable goods prices blamed on past yen rises and temporary fluctuations in hotel costs. But more companies, particularly in the service industry, are passing on rising costs to consumers. Companies’ price-setting behavior appears to be changing. The economy is sustaining momentum to achieve the BOJ’s 2 percent inflation target.”

“The board will engage in further debate on price moves at its next rate review in July, when it issues its quarterly long-term forecasts.”

“While there may be a need to deepen debate (on why inflation remains subdued), but there’s no plan now to conduct another comprehensive review on price developments.”

ON JAPAN LAGGING U.S., EUROPE IN NORMALIZING MONETARY POLICY

“Each country must opt for the best monetary policy in light of its economic and price conditions. Japan’s economy is seeing labor markets tighten and the output gap improving, but prices aren’t rising much. As such, it’s most appropriate to patiently maintain our powerful monetary easing.”

“There are some factors seen in the United States and Europe that are keeping inflation in Japan subdued. On top of that, there are factors unique to Japan that are weighing on inflation. That’s the deflationary mindset of households and companies, which became entrenched due to 15 years of deflation.”

“Short-term inflation expectations tend to move in response to underlying price moves. But medium- and long-term inflation expectations aren’t rising much. That’s due to Japan’s deflationary mindset.”

Reporting by Leika Kihara; Compiled and edited by Subhranshu Sahu

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