The Bank of Japan decided to leave policy settings unchanged at Thursday’s meeting. While policymakers nudged down their growth and inflation forecasts, they still expect to hit the 2% inflation target in the first half of FY2016, which starts next March. But Mr Kuroda’s insistence that the delay in reaching the inflation target is entirely due to the collapse in the price of crude oil is complacent. The economic recovery is stalling, wages are barely rising, and inflation excluding food and energy is near zero. Capital Economics says “We remain convinced that more easing will be needed before too long, perhaps as early as July.”
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