Japan's central bank governor said Thursday that the Japanese economy remains on a moderate recovery path as the impact of the consumption tax hike in April 2014 is diminishing.
"The economy has continued to recover moderately, and the reaction after a last-minute rise in demand before the April sales tax hike is easing as a whole," Bank of Japan (BOJ) Governor Haruhiko Kuroda said at the opening of the central bank's quarterly branch managers' meeting.
"The BOJ will maintain its quantitative and qualitative easing until necessary to achieve its 2 percent price target in a stable manner," Kuroda pledged. He also underlined the intended effects of the drastic monetary easing policy that the BOJ adopted in April 2013 and expanded last October. "We will make necessary policy adjustments by examining both upside and downside risks to economic and price conditions." BOJ has launched a massive monetary easing program to end deflation that has lasted for nearly 15 years and achieve the two-percent price goal in the fiscal year 2015.
The government raised the tax to eight percent in April last year from five percent. Prime Minister Shinzo Abe decided in November to postpone a further 2-point tax increase to 10 percent, originally set for October 2015, by 18 months until April 2017 after Japan's economy shrank 1.9 percent in the July-September quarter.