Bank of Japan expects no inflation ahead
The low inflation expectation is a result of the effects of the decline in energy prices, the Bank of Japan said in a statement.
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The Bank of Japan (BoJ) has revealed it anticipates next to no inflation for the time being and will leave its monetary policy unchanged.
The low inflation expectation is a result of the effects of the decline in energy prices, the BoJ said in a statement.
Itt will continue its quantitative easing (QE) programme to expand the economy’s monetary base at an annual pace of ¥80 trillion (just under $NZ1 trillion).
BoJ expanded its QE programme late last year, in a bid to raise inflation to 2%, as well as stimulate more growth in the economy.
BoJ governor Haruhiko Kuroda insisted sustained inflation could be achieved in two years when he was appointed in April 2013.
However, things are looking much grimmer for Mr Kuroda as that target is a long way off current inflation levels.
He said in a news conference after the statement was released that the CPI dipping into negative territory could not be ruled out.
But Mr Kuroda remains optimistic, telling reporters that Japan’s economy has continued its “moderate recovery trend.”
He said low oil prices will rebound later this year and this will help to stimulate private consumption, leading to inflation increasing closer to the BoJ’s 2% target.
The inflation news is also a blow to Japan’s Prime Minister Shinzo Abe, the architect of “Abenomics” – a multi-pronged economic reform strategy that aimed to curb Japan’s economic stagnation.
Earlier this month, Japan was showing signs of economic promise as the world’s third largest economy clawed itself out of the grasp of recession, recording an annualised GDP growth rate of 2.2% in the last quarter of 2014.
Jason Walls
Wed, 18 Mar 2015
Wed, 18 Mar 2015
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Bank of Japan expects no inflation ahead
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