Kuroda Says He Told Abe BOJ Policy to Be Adjusted as NeededMaiko Takahashi and Toru Fujioka
Bank of Japan Governor Haruhiko Kuroda said he told Prime Minister Shinzo Abe that the central bank won’t hesitate to adjust monetary policy if needed, after the pair met for lunch in Tokyo today.
“We are on track to achieve our 2 percent price-stability target, but only halfway,” Kuroda told reporters after the meeting at the Prime Minister’s Office, held after the governor returned from International Monetary Fund and World Bank gatherings in Washington. Abe didn’t make any special policy requests, Kuroda said.
Abe and Kuroda need to steer the world’s third-biggest economy through a slump in consumption that’s projected after the government raised a sales tax on April 1 to help improve the nation’s finances. While investors are focused on prospects for additional monetary easing, Kuroda indicated on April 8 that he’s not considering such a move for now.
In Washington, on April 11, during the gathering of top finance officials, Kuroda said that the central bank is “on track to achieving our 2 percent price stability goal,” adding that it would make policy adjustments if “something happens to hobble our progress.”
While Kuroda’s unprecedented stimulus helped weaken the yen 18 percent against the dollar in 2013, the Japanese currency has strengthened about 3.5 percent this year. The yen traded at 101.79 at 5:04 p.m. in Tokyo today, up 0.1 percent after the Topix index halted a seven-day slide to close 0.3 percent higher.
Abe didn’t make any requests for more monetary easing at the meeting, Chief Cabinet Secretary Yoshihide Suga told reporters today.
Kuroda and Abe had similar meetings in June and December last year. Kuroda also regularly attends certain Cabinet and government committee gatherings.
Abe’s bid to vault Japan out of more than a decade of deflation risks losing public support by spurring too much inflation too quickly. Businesses from Suntory Beverage and Food Ltd. to beef bowl chain Yoshinoya Holdings Co. have raised prices more than the 3-percentage-point increase in the consumption levy.
The tax hike is set to spur a contraction this quarter before a return to growth in the July-September period. A survey of economists ahead of last week’s BOJ meeting showed 72 percent forecasting extra easing would happen before or during July.