- Marcel Thieliant, an economist at Capital Economics
During this week's meeting, the Bank of Japan maintained the course of the monetary policy and laid out projections underscoring its conviction that the economy is on the right track. Kuroda is constantly assuring markets that the 2% inflation will be reached within the planned period of time, however, he hesitates to give any projections on when and how quantitative and qualitative easing will be ended.
The economy is gaining momentum even despite the tax hike. However, still after one year into his job, Kuroda faces scepticism– not only from investors but from his own colleagues. At the latest one-day policy meeting central bankers agreed unanimously to keep the monetary policy on hold, however, amid rising uncertainty surrounding economic future, policymakers cast a split vote over whether to endorse the BoJ new semi-annual outlook report on growth and inflation. The biggest sticking point was obviously the inflation target, which is considered to be too optimistic. Takehiro Sato and Takahide Kiuchi see inflation staying around the same level and not picking up above 1.3%. Both of them refused to endorse the contradictive report, calling on the other members to erase word "high possibility" from the report. The recent increase in inflation was mostly provided by a sharp drop in the Yen. Now, the Yen has stabilized trading around the same levels it did last summer.
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