The Bank of Japan (BOJ) kept monetary policy steady on Thursday but once again pushed back the timing for achieving its ambitious inflation target.
BOJ is reinforcing views that it will lag well behind other major central banks in scaling back its massive stimulus programme, reports Reuters.
The central bank pushed back by a year the timing for hitting its ambitious 2 inflation target, in a fresh blow to Governor Haruhiko Kuroda's radical monetary experiment aimed at sustainably ending deflation.
It now expects inflation will not reach that level until sometime in the fiscal year ending in March 2020.
The BOJ has now pushed back the price target timeframe six times since BOJ Governor Kuroda launched his huge asset-buying program in 2013.
"The BOJ's hands are tied. Central banks in the United States and Europe are headed toward higher rates and balance sheet reduction, but the BOJ is headed in the opposite direction," said Hiroaki Muto, economist at Tokai Tokyo Research Center.
"The message seems to be the BOJ is prepared to maintain easy policy indefinitely..."
As widely expected, the BOJ maintained its short-term interest rate target of minus 0.1 per cent and its 10-year government bond yield target of around zero per cent.
While companies were facing rising labour costs from a tight job market, many of them were making ends meet by hiring more temporary workers and streamlining operations, the BOJ said.
Such efforts are weighing on wages and prices, creating a disconnect between stronger economic activity and low inflation, it said.
Japan's economy grew at an annualised 1.0 per cent in the first quarter thanks to robust global demand and a pick-up in private consumption.
Data earlier on Thursday showed its exports rose for a seventh straight month in June.
But core consumer prices in May rose just 0.4 per cent from a year earlier, well below the BOJ's 2 per cent target, according to Reuters.
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