Japan's central bank governor on Monday reiterated that the domestic economy remains on a moderate recovery path despite the consumption tax hike in April, showing confidence with the effects of the central bank's drastic monetary easing policy adopted last year.
"A quantitative and qualitative easing has continued to exert its intended effects, "Bank of Japan (BOJ) Governor Haruhiko Kuroda at the opening of the central bank's quarterly branch managers' meeting. Kuroda also said the BOJ will make necessary policy adjustments to achieve its 2-percent inflation goal while examining both upside and downside risks to economic and price conditions. As for its outlook, the BOJ chief said the Japanese economy is expected to continue to recover moderately as a trend, with the effect of the sales tax increase in April from 5 percent to 8 percent, likely to gradually subside.
In April 2013, the BOJ launched a massive monetary easing program to end deflation that has lasted for nearly 15 years and achieve the 2 percent price goal in fiscal 2015.
The measures center on doubling the monetary base and purchases of government bonds in two years, as well as to purchase more risky financial assets, including exchange-traded funds and real estate investment trusts.
Meanwhile, the BOJ maintained the assessments on eight of nine regional economies in the country.
In its quarterly report released after the meeting of regional branch managers, the BOJ said, "All regions reported that the economy had continued to recover or had been recovering moderately as a trend." The background to these reports included the fact although some weakness on the production side had been observed in some aspects, domestic demand had been firm, and the employment and income situation had been improving steadily," the report said. In the last report in July, all nine regions noted that their economic assessments were steady.