Bank of Japan Gov. Haruhiko Kuroda showed confidence Friday in achieving the central bank's 2 percent inflation target to beat deflation, saying the economy is moving "smoothly" toward the goal.
But for the economy to achieve sustainable growth, it is an "essential condition" that the government establish "a sustainable fiscal structure," he said, ahead of a decision by Prime Minister Shinzo Abe on whether to raise the sales tax as planned in April.
Kuroda added that stable moves of long-term interest rates reflect trust from the market and the public that Japan is making efforts to restore its fiscal health.
"The government needs to steadily make progress to achieve a sustainable fiscal structure and we strongly expect it," he said in a question-and-answer session after delivering a speech in Tokyo.
