Bank of Japan might gave up from the inflation target

Bank of Japan might gave up from the inflation target and delay it in time, said the Governor of the monetary regulator Haruhiko Kuroda. He did not specify how such delay may affect the monetary policy decisions, but stressed that the program for the purchase of assets of the bank may be delayed in the future if the yield on 10-year bonds fell below the target level of about 0%.

In a speech to parliament on Friday, Haruhiko Kuroda said that he expected Japanese economic growth to accelerate in the next fiscal year that will begin on April 1, because of improved prospects for global growth.

The governor of Bank of Japan said that weakness in the underlying CPI (which excludes energy and food) could force the financial regulator to lower its forecast for inflation in the review of macroeconomic expectations on November 1. In August, the annual core inflation for the sixth time was in negative territory.

Despite Japan struggling with low growth and depressed domestic consumption, property development has stood out, being one of the biggest beneficiaries of the increased lending, setting of a wave of residential and office development in Japan’s largest cities. The Bank of Japan said commercial banks’ capital adequacy ratios are high enough to withstand financial shocks, according to the report. The report also said banks do not face any liquidity problems but should continue to carefully manage risks when extending new loans.

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