BoJ chief to move on deflation

Newly-appointed Bank of Japan (BoJ) governor Haruhiko Kuroda said he would aggressively ease central bank monetary policy to help the world's third largest economy out of years in the doldrums.

"To Prime Minister Abe, I said that I will make all-out efforts, together with the two deputy governors, to pull Japan's economy out of deflation," Kuroda said Thursday after meeting Prime Minister Shinzo Abe.

Kuroda took office on Wednesday, vowing to support Abe's economic policy aimed at spurring economic growth through higher inflation. Abe has repeatedly stressed the need to overcome falling prices and subsequently low investment - known as deflation - which he believed were at the heart of Japan's stagnating economy over the past almost two decades.

Kuroda, who headed the Asian Development Bank before becoming BoJ governor, said Japan's central bank had been too timid in its approach to fostering economic growth. He hailed the government's target of driving inflation to about 2 percent to tackle deflation.

On Tuesday, outgoing BoJ Governor Masaaki Shirakawa said he had failed to reverse deflation which had inhibited private spending and corporate investment in Japan since 1990.

However, he warned that expansive monetary policy alone would not promote growth, as he pointed to the need for deregulation and a reduction in Japan's huge public debt.

uhe/dr (AFP, AP)