BOJ Kuroda's meeting with PM Abe won't alter policy stance: sources

Mon Apr 14, 2014 1:20am EDT
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TOKYO (Reuters) - Bank of Japan Governor Haruhiko Kuroda and Prime Minister Shinzo Abe will revive their regular meetings this month, people familiar with the matter said, in a sign the government may be concerned about recent stock market declines and an uptick in the yen.

Kuroda has remained bullish about the outlook for economic recovery and an escape from deflation, but the meeting with Abe could revive expectations of additional stimulus.

However, the sources said the government won't be attempting to pile pressure on the BOJ for more monetary easing, one year after the central bank launched its unprecedented stimulus.

The central bank remains confident that it can meet its 2 percent inflation target by around April next year without resorting to additional monetary easing, a point Kuroda made clear at his news conference last Tuesday.

But the recent selloff in stocks and an uptick in the yen, in part caused by market disappointment over Kuroda's denial of immediate action, has prompted the BOJ to reiterate to markets that it remains ready to act if needed.

"Of course we're making steady progress toward meeting our 2 percent inflation target, but we're only half way through," he told a news conference after attending the G20 finance leaders' gathering on Friday.

"That's why we will continue to steadily proceed (with the current ultra-loose policy) and will adjust monetary policy without hesitation if achievement of our price target is threatened," he said.

The BOJ's efforts to explain its stance come as the central bank felt that markets misinterpreted Kuroda's comments last Tuesday by focusing too narrowly on his denial of immediate action, the sources said on condition of anonymity.

They added that the BOJ remained steadfast in its view that no additional stimulus is needed for now, despite the recent weakness in global markets on jitters over a slowdown in China's economy and tensions in Ukraine.   Continued...

Bank of Japan Governor Haruhiko Kuroda speaks during a seminar in Tokyo March 20, 2014. REUTERS/Yuya Shino