(Nikkei: February 28, 2015 – p. 5)
In his speech delivered at the Japan National Press Club on Feb. 27, Bank of Japan Gov. Haruhiko Kuroda emphasized that he is “determined to promptly achieve a 2% increase in Japan’s consumer price index (CPI) from the previous year.” He reacted strongly to the view that the plan to achieve the goal in “about two years” should be postponed.
Kuroda spent a lot of time explaining the reason “for aiming to promptly achieve the target of 2%.” He said that “enough speed and momentum to change people’s expectations are needed” since the projected price inflation rate is lower than 2% due to prolonged deflation.
To that end, Kuroda explained that the BOJ has set the deadline of “as soon as possible, with a period of about two years in mind.” He also said that the BOJ’s promise to achieve the goal promptly is the “core” of its large-scale monetary relaxation policy. He reiterated his stance of adhering to this policy.
The ratio of CPI increase in January released on Feb. 27 dropped to 0.2%, excluding the consumption tax hike and fresh produce. However, Kuroda said: “The basic price increase rate will grow from now on as well,” pointing out that the decrease in the rate of increase is a temporary phenomenon due to the plunge in crude oil prices. (Slightly abridged)