BOJ Kuroda maintains positive view on economy

Tue Apr 15, 2014 9:58pm EDT
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By Leika Kihara

TOKYO (Reuters) - Bank of Japan Governor Haruhiko Kuroda on Wednesday affirmed its upbeat view of the economy, even as global financial markets wobble, stressing that growth will pick up around mid-year as the sting of a sales tax hike fades.

Price rises will broaden as the economy continues gradually to improve, Kuroda added, reiterating his view that Japan is making headway towards the central bank's price goal of 2 percent inflation in about a year's time.

"It's true (the tankan survey published earlier this month) showed a wide range of companies, especially among automakers and retailers, holding a more cautious view about the economic outlook," Kuroda told a parliamentary session.

"But the level (of confidence) remains high and corporate capital spending plans for fiscal 2014/15 is solid. Companies' positive stance is maintained," he said.

Kuroda's comments came a day after he met Prime Minister Shinzo Abe to discuss the economy, which drew some market speculation the BOJ may come under pressure to expand stimulus as a rebound in the yen and sliding Japanese share prices cloud the outlook for the world's third-largest economy.

Kuroda attempted to quash this speculation, telling reporters after the meeting that the premier did not ask him to take further measures to end deflation.

BOJ officials have repeatedly expressed confidence that this month's increase in the national sales tax will not derail the economy or prevent inflation from hitting the central bank's 2 percent target.

But many economists and traders say the BOJ will have to ease policy again - perhaps in July - as consumer price gains are likely to stall. The BOJ has had trouble bridging this gap in perception about future policy moves.   Continued...

Bank of Japan Governor Haruhiko Kuroda speaks during a news conference at the BOJ headquarters in Tokyo February 18, 2014. REUTERS/Yuya Shino