BoJ Governor Haruhiko Kuroda said the central bank already has a framework that’s “quite similar” the Fed’s average inflation targeting. That is, to allow inflation to overshoot the 2% target. “We have no intention to change our inflation targeting policy and forward guidance,” he added.
On the economy, he remained fairly upbeat. “Japan’s economic activity is gradually bottoming out” as exports, output and private consumption pick up, Kuroda noted. “The lessons learnt from the current crisis will contribute to strengthening (Japan’s) growth potential”.
BoJ will announce monetary policy decision again on October 29. Most analysts expect no change but some argue that BoJ could extend the time frame of the pandemic measures beyond next March. Also, there might be a slight downward revision in growth outlook to reflect that the world is still facing risks of returning to lockdown.
