Japan's central bank seeks 2% inflation target

Bank of Japan Deputy Governor Kikuo Iwata said Thursday the central bank will maintain its ultra-loose monetary policy until two percent inflation target is achieved in a stable manner. "The Japanese economy is on track to achieve BOJ's two percent inflation target in fiscal 2015, and the effects of monetary easing will become clearer from now. Under such circumstances, what is most important is that the central bank steadily pursue quantitative and qualitative easing under the current policy," Iwata said in a speech to business leaders in Miyazaki City, southern Japan. "Even if the annual inflation rate reaches our two percent goal, the BOJ will not suddenly terminate the current monetary easing unless the bank judges that inflation is likely to remain around that level in a stable manner," Iwata added. Japan's core consumer price index rose 0.4 percent in 2013 from the previous year for the first increase in five years, the government said last week. Last April, the BOJ launched a massive monetary easing program to end deflation that has lasted for nearly 15 years and achieve the two percent inflation target 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. The BOJ will make adjustments in the monetary policy as appropriate if necessary, according to Iwata. The official also said the Japanese economy is expected to grow at a pace above its potential growth rate despite a sales tax hike in April, from the current five percent to eight percent.