TOKYO (AFX) - Bank of Japan (BoJ) governor Toshihiko Fukui said he expects core consumer prices, which posted their first year-on-year rise in two years last November, to continue moving up as the Japanese economy maintains its modest recovery.
"The year-on-year change in nationwide core CPI, which recently turned to a plus, is expected to enter a rising trend ahead, as gaps between supply and demand narrow and downward pressure from unit labour costs ease," Fukui told a quarterly meeting of BOJ branch managers.
Last November Japan's core nationwide consumer price index rose 0.1 pct from a year earlier.
The central bank has committed to keeping its present ultra-easy monetary policy until the year-on-year change in the monthly core CPI moves above zero for a prolonged period; that there is no sign of deflation re-emerging and that the economy is growing steadily.
In the meeting with BoJ staff, Fukui reiterated that the bank "will maintain its quantitative monetary easing until the year-on-year change in the nationwide core CPI moves stably above zero."
He expressed optimism about prospects for the Japanese economy, saying the world's second-largest economy "is expected to maintain a long-lasting recovery."
"Exports are expected to continue to increase on the back of an expansion of overseas economies, while domestic demand is also likely to keep expanding reflecting corporate profit growth and increases in wages," he said.
"However close attention will have to be paid to rising crude oil prices and their impact on the domestic and overseas economies," Fukui said.
Yasuhiko.Seki@Xfn.com
ys/mb
For more information and to contact AFX: www.afxnews.com and www.afxpress.com
"The year-on-year change in nationwide core CPI, which recently turned to a plus, is expected to enter a rising trend ahead, as gaps between supply and demand narrow and downward pressure from unit labour costs ease," Fukui told a quarterly meeting of BOJ branch managers.
Last November Japan's core nationwide consumer price index rose 0.1 pct from a year earlier.
The central bank has committed to keeping its present ultra-easy monetary policy until the year-on-year change in the monthly core CPI moves above zero for a prolonged period; that there is no sign of deflation re-emerging and that the economy is growing steadily.
In the meeting with BoJ staff, Fukui reiterated that the bank "will maintain its quantitative monetary easing until the year-on-year change in the nationwide core CPI moves stably above zero."
He expressed optimism about prospects for the Japanese economy, saying the world's second-largest economy "is expected to maintain a long-lasting recovery."
"Exports are expected to continue to increase on the back of an expansion of overseas economies, while domestic demand is also likely to keep expanding reflecting corporate profit growth and increases in wages," he said.
"However close attention will have to be paid to rising crude oil prices and their impact on the domestic and overseas economies," Fukui said.
Yasuhiko.Seki@Xfn.com
ys/mb
For more information and to contact AFX: www.afxnews.com and www.afxpress.com
© 2006 AFX News
