Bank of Japan Governor Kuroda speaking with CNBC on the sidelines of the 2017 Asian Development Bank meeting in Japan
- [A projected growth rate of] 1.5 percent is not great, but in Japan it is well above medium-term potential growth rate
- Meaning the output gap continues to shrink and becoming positive
- And the labor market continues to tighten so that wages and prices would eventually rise to achieve the 2 percent inflation target around fiscal 2018
- "Yield curve control has been functioning quite well
- And of course if this is around 0 percent 10-year [Japanese Government Bond] target could or should be changed - of course every monetary policy committee meeting, the policy board would discuss and decide whether it should be adjusted upward or downward"
- "But I feel that since the economy is likely to grow at around 1.5 percent, and wage and prices would start to accelerate in coming months and years, I think we should, for the time being, maintain this around 0 percent operational target."
- Expects the annual spring wages negotiations to result in a base pay increase similar to last year's
- The deal-making between businesses and labor tends to "forecast past the 12 month inflation rate, to settle the wage increase or pay rise"
Kuroda on CNBC interview, piece is here
USD/JPY lower:
