Bank of Japan Deputy Gov. Kikuo Iwata said Thursday it is "most important" that the central bank's aggressive quantitative easing policy stand pat and took a cautious stance on further easing amid talk of new steps being prepared to cushion the first stage of the sales tax hike in April.
"What is most important is that the bank steadily makes progress under the current policy framework of quantitative and qualitative monetary easing" launched in April last year, Iwata said in speech in Miyazaki.
But he did not rule out the possibility of additional easing, saying the central bank "will make adjustments in the conduct of monetary policy as appropriate" if it judges that achieving the 2 percent inflation target will become difficult due to previously unforeseen factors.
On the outlook for the economy, Iwata said it is likely to take more time to stimulate growth via corporate lending by financial institutions under the BOJ's current policy.
"The impact of monetary easing will be full scale from now on," he said.
In the meantime, Iwata said exports "still lack momentum," although they have been picking up due to slowing growth in some emerging economies in Southeast Asia that have deep ties with Japanese firms.