Bank of Japan Gov. Haruhiko Kuroda said Saturday at a forum in Portugal that Japan is overcoming the deflation that has plagued its economy for nearly two decades, according to the text of his speech released Sunday by the central bank.
Referring to "positive signs" like inflation expectations and base pay hikes this spring, Kuroda told the ECB Forum in Sintra that the BOJ's plan to stoke 2 percent inflation was on track.
"All these signs indicate that we are now overcoming the deflation that has long been afflicting our economy," he said.
"The latest data point can be interpreted as confirming that underlying inflation in Japan has been improving significantly, although the firmness is currently masked by the temporary negative impact of the sharp decline in oil prices," he said.
"Although a central bank cannot directly change the potential growth rate, the Bank of Japan's unprecedentedly accommodative monetary stimulus is certainly helping the reforms by dispelling the deflationary mindset," he said.
The comments came a day after the BOJ adopted a slightly brighter view on the economy, with Kuroda sounding more upbeat and rejecting any immediate need for further monetary easing to achieve its 2 percent inflation goal.
The bank's latest assessment said Japan's economy "continued to recover moderately."
Kuroda claimed at a news conference on Friday that this went "one step further" than its previous assessment in April, which said the economy "has continued its moderate recovery trend."