Bank of Japan Gov. Haruhiko Kuroda said the central bank can help avoid negative price shocks and achieve its 2 percent inflation target by working on inflation expectations through forward guidance.
"Although there remain issues to be resolved to achieve the price stability target of 2 percent, the environment surrounding prices in Japan has improved steadily compared to five years ago," Kuroda said in a speech Monday at the University of Zurich's Swiss Institute of International Studies. "It is not easy to quickly dispel the deflationary mindset that has formed over the course of 15 years of deflation."
The BOJ remains far from its 2 percent inflation target even after more than 4½ years of massive monetary easing. Kuroda has repeatedly said his bank needs to continue with its stimulus, even as other central banks begin taking steps to tighten policy.