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BOJ Kuroda Tries to Cool Tightening Speculation

23 Jan 2018 7:43 am
   By Megumi Fujikawa 

TOKYO--Bank of Japan Gov. Haruhiko Kuroda played down recent speculation over monetary tightening Tuesday, reiterating his message that the central bank will maintain loose monetary conditions until stable 2% inflation is met.

"We haven't reached a phase where we should discuss how to exit [from monetary stimulus], given that inflation is still distant from the 2% inflation target," Mr. Kuroda said at a news conference.

His comments helped push the dollar up to a session high against the yen, outweighing earlier falls following a BOJ meeting.

The Japanese central bank left policy unchanged at the meeting and stuck to its view that inflation will likely reach 2% in two years.

Speculation over the bank's commitment to its current policy settings and the possibility it might raise its interest rate targets this year has contributed to a rise in the yen since the start of the year.

While the bank left all its growth and inflation forecasts untouched in a quarterly outlook report released after the meeting, the bank changed the language describing inflation expectations.

The bank said expectations have been more or less unchanged, compared with the wording used in December that described them "in a weakening phase."

The adjustment to wording likely contributed to the brief strengthening of the yen after the meeting.

Mr. Kuroda said improvements on inflation expectations would strengthen effects of the current easing program, but said it didn't necessarily mean the bank would raise its interest rate targets immediately.

Write to Megumi Fujikawa at megumi.fujikawa@wsj.com

(END) Dow Jones Newswires

January 23, 2018 02:43 ET (07:43 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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