HomeLive CommentsBoJ Kuroda: Deflationary mindset caps medium- and long-term inflation expectations

BoJ Kuroda: Deflationary mindset caps medium- and long-term inflation expectations

In the post meeting press conference, BoJ Governor Haruhiko Kuroda admitted that ” year-on-year growth in consumer prices is slowing”. Falling durable goods prices and temporary fluctuations in hotel costs were part of the reasons. However, “companies’ price-setting behavior appears to be changing” as they’re passing on rising costs to consumer. Hence, the economy is “sustaining momentum” to achieve the 2% inflation target. Kuroda also said there will be further debate on price moves at the next meeting in July, when the quarter long-term forecasts will also be published.

Kuroda added that “Japan’s economy is seeing labor markets tighten and the output gap improving, but prices aren’t rising much.” There are external factors from US and Europe. At the same time, that’s the deflationary mindset of households and companies, which became entrenched due to 15 years of deflation.” That’s the reason keeping medium- and long-term inflation expectations subdued.

Featured Analysis

Learn Forex Trading