BOJ Kuroda says consumer spending picking up

April 18, 2017 – Bank of Japan Gov. Haruhiko Kuroda said Monday that consumer spending is escaping weakness, signaling his confidence in the economy ahead of the central bank’s policy meeting next week.

In a speech at an event hosted by trust banks, Mr. Kuroda said employment and wages are improving steadily, citing a possibility that many companies are likely to offer base-salary increases for their workers during the financial year ending March 2018.

“Supported by those developments, consumer spending—which was showing some weakness a while ago—is picking up,” Mr. Kuroda said.

Recovery in consumption means a lot for the BOJ because it accounts for 60% of Japan’s economic output and its sustained improvement is considered essential for generating the bank’s target of 2% inflation.

Still, Mr. Kuroda maintained his cautious view on prices, saying inflation “lacks momentum” and warrants close attention.

The BOJ board is holding a meeting April 26-27, where it is set to update its quarterly outlook on growth and prices. The bank is widely expected to keep policy unchanged.

Source: The Wall Street Journal