The head of the Bank of Japan, Kazuo Ueda, said that the central bank expects accommodative monetary conditions to continue for the time being, while consumption will gradually increase against the background of steady wage growth, which increases household incomes.
Meanwhile, Ueda said that if the data continues to point to an acceleration in inflation, the Central Bank will have to consider reducing the degree of monetary stimulus.
"Trend inflation has yet to reach our 2% target, so it is important to maintain adaptive monetary conditions at the moment. If economic and price conditions confirm our forecasts, trend inflation will gradually accelerate, which will require consideration of the possibility of reducing the degree of stimulation. But everything will depend on the upcoming data," Ueda said, adding that now the Central Bank cannot provide a clear timeline for the next increase in interest rates.
According to official data, in February the national CPI increased by 2.8% per year, as expected, after an increase of 2.2% per year in January. On a monthly basis, inflation was flat for the second straight month. Core CPI, which excludes the volatile costs of food, was up 2.8% per annum - also matching forecasts and accelerating from 2% per annum in January.