Bank of Japan (BOJ) Governor Haruhiko Kuroda reiterated on Tuesday that the Japanese economy is on course to achieving BOJ's 2-percent inflation goal, but still halfway to attaining the target.
"The economy has been steadily moving along a path to achieving the inflation target as expected, "Kuroda said in a speech at a meeting with business leaders in Osaka, western Japan, showing confidence with the effects of the central bank's drastic monetary easing policy adopted in last year.
"But it is still only halfway. The BOJ will continue its massive monetary easing program to achieve an inflation target of 2 percent in a stable manner," Kuroda said. The governor also said the central bank will adjust monetary policy without any hesitation if the inflation goal becomes difficult to achieve.
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 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.
Japan's economy shrank at an annualized rate of 7.1 percent in the second quarter, posting the steepest contraction since the first quarter of 2009, as personal consumption and capital spending slumped following a sales tax hike in April.