TOKYO (Reuters) - The governor of the Bank of Japan on Monday stressed the central bank's resolve to maintain its massive stimulus programme for as long as necessary to achieve its 2 per cent inflation target.
Haruhiko Kuroda also said the world's third-largest economy is set to continue recovering moderately as a trend, despite the pain from a domestic sales tax hike in April on household spending.
"The BOJ will examine upside and downside risks to the economy and prices, and adjust monetary policy as needed," he told a quarterly meeting of the BOJ's regional branch managers.
Kuroda said Japan's financial system has remained stable as a whole, and that the central bank's stimulus programme has been exerting its intended effects in pulling the country out of 15 years of deflation.
The branch managers will release a report on the state of the regional economies after their meeting at the BOJ's headquarters in Tokyo, which will offer details on how the tax hike has affected broader areas of Japan.
The report will be among factors that the BOJ's board members will scrutinise at their policy-setting meeting next week, when they are set to keep monetary settings unchanged and conduct a quarterly review of their long-term growth forecasts.
The BOJ has keep monetary policy steady since deploying an intense burst of monetary stimulus in April last year, when it pledged to double base money via aggressive asset purchases to accelerate consumer inflation to 2 per cent in roughly two years.