BoJ says Kuroda didn’t revise price outlook in Davos remark

By BLOOMBERG

HONG KONG • The Bank of Japan (BoJ) said governor Haruhiko Kuroda wasn’t revising the inflation outlook when he said in Davos last Friday that consumer prices are finally moving close to the 2% target.

“There are some indications that wages are actually rising, and some prices have already started to rise and even mediumto long-term inflation expectations, which have been so weak in the last couple years, are now slightly picking up,” Kuroda, speaking in English, said on a panel at the World Economic Forum in the Swiss ski resort.

“So, there are many factors which made achieving 2% inflation target or price stability target so difficult and time-consuming, but I think we are finally close to the target,” he said.

Later, a spokesman for the BoJ said Kuroda’s comment is not different from the central bank’s view stated in the Outlook for Economic Activities and Prices that was released on Jan 23. Kuroda meant the timing of the Consumer Price Index reaching the 2% target will likely be “around fiscal 2019”, the spokesman said by email.

The yen advanced after Kuroda’s remark, strengthening as much as 1%, then pared the gain following the statement from the BoJ spokesman.

“Currency traders are very closely gauging any factor for the yen to gain after the currency has remained relatively weak,” said Masamichi Adachi, a senior economist at JPMorgan Chase & Co. “Kuroda probably thought that his dovish stance has been well understood after he made it crystal clear at a post-meeting press conference this week. I think Kuroda just meant that inflation is improving along with an economic recovery at home and abroad.”