BoJ Governor Haruhiko Kuroda said that it’s too early to consider exit from ETF purchases. “When we are to unload our ETF holdings, we will set guidelines on how to do this at a policy-setting meeting,” Kuroda told parliament. “But we’re not at a stage now to debate an exit.”

Separately, it’s reported that BoJ is considering to downgrade inflation forecasts for the current fiscal year. The central bank expected core consumer prices to be at 0.5% this fiscal year. But cuts in mobile phone charges could push core inflation by around -0.2%. BoJ will release updated quarterly forecasts at its policy meeting on April 26-27.

BoJ Governor Haruhiko Kuroda reiterated to the parliament today that there is no need to change the 2% inflation target. He expected inflation to be negative for now due to the impacts of the pandemic. But consumer prices will “rebound thereafter, gradually accelerate the pace of increase.” “It will take time, but it’s still possible to achieve our 2% inflation target,” he said.

Kuroda also said he hoped to deepen the debate with global central bankers on the role of monetary policy in addressing climate change. “There are many factors we need to take into account, such as how this will affect distribution of resources,” he said. “We hope to deepen debate in international meetings. I’m not saying we won’t think about possibilities at all.”

In BoJ’s Regional Economic Report, assessments for two regions, Hokkaido and Tohoku, were downgraded. Hokkaido’s economy has “remained in a severe situation” and has been “more or less flat. Tohoku’s economy has “picked up as a trend” but impact of resurgence of coronavirus appears to be “growing recently”. Assessments of Hokuriku, Kanto-Koshinetsu, Tokai, Kinki, Chugoku, Shikoku and Kyushu-Okinawa were left unchanged.

Overall, BoJ said, “many regions — while noting that their economy had remained in a severe situation due to the impact of the novel coronavirus (COVID-19), primarily in consumption of services — reported that, on the whole, it had been on a pick-up trend or had started to pick up.”

Governor Haruhiko Kuroda said at the quarterly meeting of regional branch managers, “the pace of the recovery will be modest as caution over the pandemic remains.” Also, “services consumption will remain under pressure for the time being due to a resurgence in COVID-19 infections since last autumn.”

Full report here.