Bank of Japan Governor Haruhiko Kuroda said Wednesday that financial markets may gradually regain stability, reflecting the steady improvement in Japanese economic activity.
"Given that Japan's economy is on a steady path toward recovery, however, they are expected to gradually regain stability, reflecting positive momentum in economic activity," he said during a semiannual hearing on monetary policy in Parliament.
He said the rise in some market indicators of inflation expectations has come to a pause. However, other indicators including the surveys conducted on households and economists suggested a rise on the whole, Kuroda told lawmakers.
He reiterated the central bank's view that the year-on-year rate of change in consumer prices may gradually turn positive, going forward.
The BoJ will examine both upside and downside risks to economic activity and prices, and make adjustments as appropriate, Kuroda said.
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