The Bank of Japan's (BoJ) 2 percent inflation target can be achieved by next year despite the continued drop in global oil prices, BoJ Governor Haruhiko Kuroda said on Wednesday.
It was "far from the case" that the central bank would fail to meet its target, Kuroda told a New York audience. The BoJ expects to lift inflation to 2 percent during the April-September first half of next fiscal year, a forecast many analysts see as overly ambitious.
Kuroda said that corporate profits in Japan were likely to remain strong and that the yen's strong appreciation was temporary. He cited a cycle of wage gains that he said were helping drive up inflation, adding that labor market conditions were very tight.
He said that there was no current need to widen the BoJ's asset purchase program in order to stimulate the economy.
A report by Dow Jones noted that the BoJ Governor had, however, used the phrase "without hesitation" in his speech when referring to whether the central bank would adjust monetary policy if necessary. The newswire pointed out that Kuroda has not used the phrase since May, but that it had been his catchphrase in the BoJ's earlier fight against deflation.
Japan is due to report July inflation, household spending and retail sales data on Friday.
In his first public speech since the recent market rout, the central bank boss also told the audience that China's economic slowdown should not harm Japan's exports very much in coming years.
"Already exports to China have been affected, but I do not think that Japan exports in coming years will be (very) negatively affected," Kuroda told a seminar hosted by the Japan Society in New York.
That is "party because China will maintain 6 to 7 percent growth and Japanese capital goods are...quite competitive," he said.
Kuroda said China's monetary easing was an appropriate step to mitigate any impact on that country's economy, adding that some market players have become "too pessimistic" on the Chinese economy given its growth is "still quite robust."
Kuroda said that a rate rise by the U.S. Federal Reserve would be a positive for economies around the world because it would signal confidence in the U.S. recovery.