BOJ's Kuroda dismisses need for additional stimulus

Tue Apr 8, 2014 6:26am EDT
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By Leika Kihara and Stanley White

TOKYO (Reuters) - Bank of Japan Governor Haruhiko Kuroda said there was no need for additional stimulus to escape years of debilating deflation, expressing confidence on Tuesday the world's third-largest economy can ride out the impact of a sales tax rise.

Kuroda dismissed market expectations the BOJ could ease again soon to soften the blow from the tax rise that took effect of April 1, stressing a short-term disruption was unlikely to derail a steady recovery already underway.

Investors pushed the yen to its highest against the dollar in 10 days as they pared back bets of the central bank increasing its existing stimulus.

"As always, I remain convinced about the prospect for achieving our price target," Kuroda said after the BOJ's widely expected decision to make no changes to its massive stimulus.

Robust demand and an expected pickup in exports will help the economy rebound from the post-tax hike slump around July-September, he told reporters after the policy review.

"Japan is making steady progress towards 2 percent inflation. I don't think there is a need to take additional measures now."

At least three times during the media briefing, Kuroda said he saw no need for immediate action as improvements in the economy were creating more jobs and pushing up prices, though added the BOJ had policy options if it needed to act again.

"People in the BOJ probably have the impression that market participants are counting too much on additional easing," said Masayuki Kichikawa, chief economist at Bank of America Merrill Lynch in Tokyo.   Continued...

A man walks past the Bank of Japan building in Tokyo January 22, 2014. REUTERS/Yuya Shino