Bank of Japan’s Kuroda says easy policy still needed for some time

TOKYO (Reuters) – Bank of Japan Governor Haruhiko Kuroda said that the central bank must continue with accommodative monetary easing for some time to meet its 2 percent inflation target.

In an interview with CNBC published on Monday Kuroda said policy board members expect to meet the price target around fiscal 2019 but risks to this view are to the downside.

“In order to reach (the) 2 percent inflation target, I think the Bank of Japan must continue very strong accommodative monetary policy for some time,” Kuroda said in an interview at the weekend on the sidelines of the International Monetary Fund’s annual spring meetings in Washington.

“It’s necessary.”

Kuroda reiterated his view that Japan’s economy is performing well but consumer prices had been slow to accelerate.

Economists predict the BOJ will keep its short-term interest rate at minus 0.1 percent and the 10-year government bond yield target at around zero percent at its meeting ending April 27.

Separately, sources told Reuters that the central bank is likely to maintain its view that inflation will reach its 2 percent target next fiscal year when it issues new forecasts on Friday.

It is expected to project inflation staying near that level in the following year as well.

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