Bank of Japan governor sees fewer risks for markets after Fed rate rise
Japan's inflation may move towards target as long as job markets continue to tighten
Bank of Japan governor Haruhiko Kuroda says worries have receded over the risks that an expected US interest rate increase might upset global markets or trigger sharp capital outflows from emerging economies.
He also said Japan's inflation could move towards the central bank's 2 per cent target even if economic growth remained weak as long as job markets continued to tighten, suggesting that no immediate monetary easing would be forthcoming.
"The broad price trend is improving steadily and I don't see any big problem for now. Inflation expectations, which play a key role in achieving our price target, remain stable as a whole," Kuroda said after a meeting with business leaders in Osaka, western Japan, on Monday.
Kuroda, however, reiterated his readiness to expand the Bank of Japan's massive stimulus programme further if the central bank is in danger of missing its price target, to conclusively break free of a long phase of deflation.
Japan's core consumer prices fell 0.1 per cent in the year to August, the first annual drop since the central bank deployed its massive stimulus programme more than two years ago.
The Bank of Japan has held steady since expanding its stimulus programme in October last year, but the lack of inflation and weak economic growth has kept alive some expectations that it will increase the stimulus again.