Price rises will broaden as the economy continues gradually to
improve, Kuroda added, reiterating his view that Japan is making
headway towards the central bank's price goal of 2 percent inflation
in about a year's time.
"It's true (the tankan survey published earlier this month) showed a
wide range of companies, especially among automakers and retailers,
holding a more cautious view about the economic outlook," Kuroda
told a parliamentary session.
"But the level (of confidence) remains high and corporate capital
spending plans for fiscal 2014/15 is solid. Companies' positive
stance is maintained," he said.
Kuroda's comments came a day after he met Prime Minister Shinzo Abe
to discuss the economy, which drew some market speculation the BOJ
may come under pressure to expand stimulus as a rebound in the yen
and sliding Japanese share prices cloud the outlook for the world's
Kuroda attempted to quash this speculation, telling reporters after
the meeting that the premier did not ask him to take further
measures to end deflation.
BOJ officials have repeatedly expressed confidence that this month's
increase in the national sales tax will not derail the economy or
prevent inflation from hitting the central bank's 2 percent target.
But many economists and traders say the BOJ will have to ease policy
again — perhaps in July — as consumer price gains are likely to
stall. The BOJ has had trouble bridging this gap in perception about
future policy moves.
In contrast to the BOJ's optimism, the government is set to revise
its overall assessment of the economy because of the effect of the
tax hike when it publishes a monthly report due soon, the Nikkei
business daily reported.
[to top of second column]
Kuroda stressed that the economy will weaken in April-June due to
the tax hike's impact but will return to growth above its potential,
seen as around 0.5 percent, thereafter as job and income conditions
He noted, though, that Japan was only half-way towards meeting the
BOJ price target — a view he has recently started to emphasize — possibly to keep alive market expectations that the central bank is
ready to act if the economy falters.
"For now, what's important is to do our best toward meeting our 2
percent price target at the earliest date possible," Kuroda said.
The BOJ next meets for a policy review on April 30, when it will
also release new long-term economic and price projections set to
show Japan will produce sustained inflation of around 2 percent for
at least two years from mid-2015.
(Reporting by Leika Kihara; editing by Dominic Lau and Eric Meijer)
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