BoJ Kuroda: Ready to adjust policy if 2% inflation target threatened

FXStreet (Łódź) - Bank of Japan governor Haruhiko Kuroda said in a speech in Osaka on Tuesday that Japan's economy continued growing above potential and that the negative impact of the April sales tax hike on demand was seen weakening.

Kuroda stated that the economy was on track to reach the 2% inflation target around the middle of the projection period, as the bank's QQE program was having the intended effects. But in case of a change in the outlook, the BoJ was prepared to take further action, the governor assured.

He also pointed to the improvement in employment, income and household sentiment. On the other hand, output and exports have been lagging somewhat recently, but were expected to pick up again soon.

Furthermore, the BoJ stressed current geopolitical risks should be monitored closely, although he saw the global recovery advancing nevertheless. He expressed worries however about the persistently low inflation in Europe.