In the quarterly Regional Economic Report, BoJ kept assessment of all nine regions unchanged. All nine regions reported that their economy had been “either expanding or recovering”. Domestic demand had “continued on an uptrend”, with a virtuous cycle from income to spending operating in both the corporate and household sectors. But, exports and production had been affected by the “slowdown in overseas economies”.

Also, while the assessments were overall unchanged, “a somewhat increasing number of firms were pointing to heightening uncertainties over the outlook for overseas economies and their impacts, reflecting, for example, the U.S.-China trade friction.”

Full report here.

BoJ Governor Haruhiko Kuroda told the central bank’s regional branch managers that inflation is still expected to pick up gradually to 2% target. The economy is expected to continue expanding moderately as a trend, even though it’s affected by overseas slowdown. But still, BoJ would maintain easing for as long as needed to hit stable target.

Kuroda reiterated that short- and long-term interest rate will be kept at current very low levels for extended period, “at least through around spring 2020”. Also, monetary base will continue to expand, and QQE will be maintained under the yield curve control framework.

Also, Kuroda pledged that “the BOJ will make necessary policy adjustments to sustain the economy’s momentum towards achieving its inflation target.”

According to BoJ’s Opinion Survey, 83.4% of public expects price level to go up over the next five years. That’s up from 82.3% in March and was the highest since June 2016. Among them, 28.7% expects price level to go up significantly, up from 26.9%. 54.7% expects price to go up slightly, down from 54.7%.

On price levels one year from now, 80.5% expects prices to go up. 11.7% expects prices to go up significantly, up from 11.3%. 68.8% expects prices to go up slightly, up fro 67.4%.

Full survey results here.

Separately, BoJ Deputy Governor Masayoshi Amamiya told a Reuters Newsmaker event today that the baseline scenario is that “economy will continue to expand moderately and gradually push up inflation to our target”.

He added that “The output gap is still positive. More companies are raising prices. If this trend continues, people’s perception of future price moves will change. At present, the momentum (for inflation to hit 2%) is sustained.”

Though, he also warned of various downside risks. And he emphasized “if such risks hurt the economy’s momentum to achieve our price target, we won’t hesitate to consider easing more.”

BoJ Deputy Governor Masayoshi Amamiya said today the central bank has no plan to issue digital currency in the near future. And he disagreed to the idea that central banks can boost the effectiveness of negative interest rate policies by issuing digital currencies. “To overcome the nominal zero lower bound, central banks would need to eliminate cash,” Amamiya said. “Eliminating cash would make settlement infrastructure inconvenient for the public, so no central bank would do this.”

On the economy, Amamiya still expected to climb to 2% target. But he repeated BOJ wouldn’t hesitate to ease policy further if momentum to hit inflation target is disrupted. While downside risks are strong, he noted many global central bankers share the view that global economy will recover in the second half.