NAGOYA, Japan — Bank of Japan Gov. Haruhiko Kuroda said Monday it was still necessary to continue to ease monetary policy given sluggish inflation, but not exactly as it has done in the past five years.
“Japan’s economic activity and prices are no longer in a situation where decisively implementing a large-scale policy to overcome deflation was judged as the most appropriate policy conduct, as was the case before,” Kuroda said in a speech to business leaders in Nagoya, central Japan.
The central bank governor, who introduced an aggressive asset purchase program in 2013 when he took the job, said the economy has “clearly improved” on solid corporate earnings and a tight labor market. Meanwhile, core inflation excluding fresh food rose to 1% — half of the BOJ’s target —in September for the first time since February.
Given the divergence between the economy and prices, BOJ should “persistently” continue to ease monetary policy, while considering both positive and negative effects of its policy “in a balanced manner,” Kuroda said.
An expanded version of this report appears on WSJ.com.
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