Bank of Japan: Economy is recovering, rebound in oil would help anchor inflation
27 February 2015, 07:35
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On Friday, Bank of Japan Governor Haruhiko Kuroda reiterated his estimate that a moderate rebound in crude oil prices will help anchor 2% inflation "around fiscal 2015" but outlined a slip in longer-term public inflation expectations.
A plunge in crude oil prices over the past year has filtered to prices, adding downward pressure, but they are expected to "rise steadily going forward" and, as the base year effect of lower energy costs fades, he said.
Kuroda also indicated he will not conduct monetary policy in response to moves in oil prices but will focus on how oil price moves impact inflation expectations, says Reuters.
"The bank will not respond to developments in crude oil prices themselves, but in conducting monetary policy, it will closely monitor how they affect inflation expectations - or, in other words, whether conversion of the deflationary mindset will nevertheless proceed."
