BANK of Japan governor Haruhiko Kuroda has called the central bank’s ambitious inflation target “very flexible”, a week after he announced huge monetary easing measures that stunned markets.
Speaking just two weeks after taking office, Kuroda told reporters the bank’s new two per cent target would be consistently reassessed, to ensure it did not encourage asset bubbles or distort markets.
The bold target “does not mean that they will stick to that target mechanically,” he said.
“We’ll examine the effect each month but that doesn’t mean we will adjust policy every month,” he added.
The BoJ last week unleashed the world’s most intense burst of monetary stimulus, pledging to inject about $1.4 trillion (£914.6bn) into the economy in less than two years, marking a radical shift from the previous approach of incremental action. The massive scale of the stimulus pushed the yen near a four-year low against the dollar and Nikkei share average to a nearly five-year closing high.
Kuroda said he was confident the latest measures were enough to achieve the BoJ’s two per cent inflation target in roughly two years, but signalled readiness to keep pumping money aggressively for longer if the target is not achieved by then. “The key is to achieve the two per cent inflation target. We have in mind a timeframe of roughly two years, but we’ll take necessary steps until the target is met,” he said.