The Bank of Japan held its monetary settings steady at a policy meeting on Thursday and asked markets to have faith that inflation will hit its elusive 2 percent goal. But, as David Pollard reports, there was dissent from one BoJ policymaker.
Abenomics has brought massive stimulus in Japan. But there's a massive conundrum too. How to deal with inflation that - in the words of Haruhiko Kuroda - is still 'distant' from the Bank of Japan's two per cent target? (SOUNDBITE) (Japanese) BANK OF JAPAN GOVERNOR, HARUHIKO KURODA, SAYING: "We will adjust policy as needed to maintain momentum towards our inflation goal ... As such, we will take further monetary easing steps, if necessary." An annual 80 trillion yen of bond buying left on hold at this meeting. As the Bank keeps its so-called 'yield curve control' policy locked down. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "What they'll be looking for is holding that position until such a point as they get enough signals that inflation is starting to pick up from what is a very very low structurally inflationary starting point." And with a headline rate of just 0.4 per cent, some might even go further. BoJ newcomer Goushi Kataoka voting against the decision. On the basis that current policy isn't enough. (SOUNDBITE) (English) LCG SENIOR ANALYST, JASPER LAWLER, SAYING: "Actually the dissent was to cut rates rather than keep them steady. So absolutely no consideration to actually start following in the path of other central banks around the world, of course the Fed, more recently the Bank of England, perhaps eventually the ECB, to actually start tightening policy." The man behind Abenomics - Japan's prime minister - could, it's thought, be about to call a snap election. This week pledging tax, budgetary and regulatory measures to boost investment. That could also boost pressure on the BoJ to maintain ultra-loose stimulus. As Kuroda told reporters, just because U.S. interest rates rise, it doesn't mean Japanese rates have to rise too.