TOKYO -- As the global economy emerges from a period of post-crisis adjustment, Japan will make headway toward overcoming deflation next year, Bank of Japan Gov. Haruhiko Kuroda said Monday.
"The global economy seems to have finally moved out of its adjustment phase after the global financial crisis ... and is entering a new phase," Kuroda said during a speech at a meeting of the Japan Business Federation, the influential corporate lobby known as Keidanren.
"I am convinced that the coming new year will be one in which Japan's economy will take a big step forward toward overcoming deflation," he said.
To bolster Japanese economic growth, finding latent demand to lift consumption is critical, Kuroda said.
"Japan's economy has improved significantly during a period of more than three and a half years," he said. "The excessive appreciation of the yen has been fairly corrected, and stock prices have increased substantially. Corporate profits have marked their historical high levels, and business fixed investment has recovered." The governor attributed successes to the bank's bold monetary policies, such as negative interest rates and quantitative easing.
As the global and Japanese economies improve, "to ensure that Japan never falls back into deflation, it is necessary to achieve 2% inflation in this round of monetary easing," Kuroda said.
Kuroda sees the economy reviving, judging from his recent statements. Monday's speech, "A New Phase of the Global Economy and Challenges Facing Japan's Economy," also noted other positive signs. Business confidence in the manufacturing sector in both emerging and resource-rich countries has improved, and imports are recovering in emerging nations, he explained.