The Bank of Japan (BOJ) announced that it’s pushing towards its 2 percent inflation target as they are keen on consumer spending to boost economy. Therefore, the bank left its monetary policy steady on Thursday.
BOJ Governor Haruhiko Kuroda said he saw no need to alter the quantitative easing programme since rising wages are underpinning a broad uptrend in prices.
In contrast, he stated that the current weak inflation data was associated with low costs of oil rather than slow economic activity.
Initially, the inflation target of 2 percent was forecasted to be met during the current fiscal year ending 2016. However due to external factors the target is expected to be reached between April to September 2016.
"It's true that the timing for achieving 2 percent inflation has been delayed somewhat," Kuroda said during a news conference, however added that the inflation trend is improving steadily and is expected to continue improving.
It is expected for core consumer inflation to hit 0.3 percent this fiscal year and 1.3 percent the following year, barely half the pace projected by the BOJ.
Nevertheless, analysts are skeptical about his optimism as the central bank's immense money printing over the last two years has failed to boost consumer spending and companies' capital expenditure.
Despite his positive assurance of a gradual economic recovery, BOJ is expected to ease the monetary policy later this year.
The bank expanded its monetary base by $700 billion in October last year with the application of a quantitative easing program.
On Thursday they kept their pledge to increase base money through the purchases of government bonds and risky assets.