The Bank of Japan left its monetary policy unchanged yesterday, suggesting the aggressive easing measures it implemented in April were doing enough to stimulate the economy and reverse deflation.
The central bank’s governor, Haruhiko Kuroda, reiterated his support for a contentious plan to raise the national sales tax, saying the pro-growth policies implemented by the BoJ and the government of Shinzo Abe, the prime minister, would offset the tax’s potential ill effect on consumer demand.
“We can do both,” he said when asked about the difficulty of squaring a tax increase with the BoJ’s goal of reversing persistent consumer-price deflation. “There’s a strong possibility that we can maintain a positive environment and keep growth above Japan’s long-term potential.”