FXStreet (Mumbai) – Speaking to an audience of business leaders in Kumamoto, southern Japan, Bank of Japan (BOJ) Deputy Governor Hiroshi Nakaso remained quite upbeat about the central bank’s inflation target of around 2% in the near future.
He maintained that that inflation will reach the BoJ’s ambitious target sometime between April-September next, while signalling that there is no need to expand its already massive monetary easing program soon.
Nakaso said, “The underlying trend of inflation is seen improving further.”
Japanese policymakers must be prepared to deal with potential negative impact of China’s economic slowdown, especially on Japanese exports, Nakaso warned in his speech.
“Even if China’s economy maintained its growth rate, the main contribution would be from public investment, so the effect on Asian economies and Japan’s exports warrants due attention,” the BOJ policymaker added.
Nakaso also warned that an expected interest rate hike in the US could increase volatility in global markets and hurt emerging markets.
Also, the BOJ’s deputy Governor expressed confidence that Japan’s economy can weather global risks, and that exports will improve as global growth picks up.
“Exports and output are likely to increase gradually, albeit with some fluctuations,” he concluded.
(Market News Provided by FXstreet)