- Haruhiko Kuroda, Bank of Japan Governor
As widely expected the Bank of Japan kept its ultra-easy monetary policy unchanged and maintained its optimistic outlook of the economy despite a contraction in the second quarter that underlined the damage caused by an April sales tax hike, signalling confidence that it will be able to meet the 2% inflation target without additional stimulus measures. A recent slew of weak Japanese data, including a fall in household spending and tepid factory output growth in July, cast doubts on the BOJ's view the economy will grow steadily as Japan is struggling to adjust to the demand-sapping impact of the first sales tax lift in 17 years. Nevertheless, BoJ Governor Haruhiko Kuroda called for the government to proceed with another sales tax lift to fix its finances. The central bank maintained its view the economy would continue its steady recovery, with consumption set to benefit from a tightening job market that is driving up wages. Kuroda believes households would boost spending again once the pain from the tax hike waned, hinting no additional monetary stimulus would be forthcoming any time soon.
Kuroda's optimism contrasts to growing doubts among private-sector analysts that the economy can grow strongly enough to see consumer price inflation, now around 1.3 percent, accelerate toward the central bank's target.
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