Bank of Japan deputy governor sees 'good prospect' of inflation pressure building

[October 05, 2017]  LONDON (Reuters) - There is a "good prospect" of inflation pressure building up in Japan after years of slow consumer price growth, the deputy governor of the country's central bank said on Thursday.

A Japanese flag flutters atop the Bank of Japan building under construction in Tokyo, Japan, September 21, 2017. REUTERS/Toru Hanai

"We believe that the underlying momentum for inflation dynamics in Japan remains intact, as the output gap and inflation expectations continue to improve," Bank of Japan Deputy Governor Hiroshi Nakaso told a Japan Society event in London.

"There is a good prospect of inflation building up."

Nakaso said a "very tight" labor market at full employment, as well as accommodative monetary conditions, should help to counter costs to the economy from necessary structural reforms.

(Reporting by Jemima Kelly, editing by Andy Bruce)

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