Tokyo: Bank of Japan Governor Haruhiko Kuroda said Friday he does not expect the BOJ to carry out an interest rate hike or shift away from its ultraeasy monetary policy “anytime soon.”

Kuroda suggested that the central bank will stick to its current easing policy for the time being, when speaking at a press conference after the BOJ’s two-day monetary policy meeting through Friday in which the central bank decided to keep the policy intact.

The governor also described the yen’s rapid weakening as “negative and undesirable” for the Japanese economy.

“It is a one-sided view to explain the current trend on the foreign exchange market by focusing only on the widening interest rate gap between Japan and the United States,” Kuroda said.

The yen’s weakening is widely believed to have been caused by the interest rate gap, which is expanding as the U.S. Federal Reserve have been aggressively raising interest rates to fight high inflation while the BOJ maintains its accommodative policy stance.

Amid growing uncertainties surrounding the Japanese economy, including a slowdown of overseas economies and the war in Ukraine, Kuroda said, “It is appropriate to continue monetary easing.”

In a quarterly report released after the monetary policy meeting, the BOJ raised its inflation forecast for fiscal 2022 to 2.9 pct from 2.3 pct.

The inflation projection for fiscal 2023 was raised to 1.6 pct from 1.4 pct and that for fiscal 2024 to 1.6 pct from 1.3 pct.

“It’s not a situation where (the Japanese economy) can achieve the BOJ’s 2 pct inflation target stably and sustainably,” Kuroda said, stressing his commitment to achieving the target while realizing wage growth.

Meanwhile, the BOJ lowered its estimate for the country’s real gross domestic product growth in fiscal 2022 to 2.0 pct from 2.4 pct, considering the spread of the novel coronavirus during the summer and the slowdown of overseas economies.

Noting that the economic outlook is skewed to the downside, Kuroda vowed that the BOJ “will not hesitate to take additional monetary easing measures if necessary.”

JIJI Press