Roundup: BOJ chief sees Japan rocketing into inflationary orbit, data, skeptics suggest otherwise

Bank of Japan (BOJ) Governor Haruhiko Kuroda on Friday stood by his two-year goal of achieving a lofty inflation target, despite some skepticism from within the bank's policy board, leading economists and the wider market.

The BOJ chief has remained unwavering in his mission to reverse the nation's deflation and hit the bank's two percent inflation target "in or around fiscal 2015," while dismissing claims that future policy will be dictated by the current oil glut and future moves in oil prices.

Kuroda maintained that the bank unleashing massive amounts quantitative easing last year to counter the downside effects of a tax hike in April, that plunged the nation back into recession, had been enough for the time being to get the economy and inflation back on track, but insisted that the bank was in no hurry to further expand its massive assets purchasing program.

"The BOJ won't respond to oil price moves themselves, but will closely monitor how they affect inflation expectations," Kuroda said in a news conference, maintaining his stance that the bank wanted to change the nation's "deflationary mentality."

That said, the central bank chief, as he has said before, stated that if needs dictate, the bank will readily change its policy.

Some leading economists have said that the bank setting a timeframe to achieve its two percent inflation target has put undue pressure on the bank and the economy to perform on cue to achieve this.

They've suggested that such a deadline could lead to last- minute monetary easing and forays into the currency markets, purely to hit its target.

Countering such accusations, the BOJ chief said that " Considering Japan's unique situation, it was important to attach a timeframe for meeting the target."

But concerns remain rife following data released Friday showing that Japan's core consumer price index last month retreated 0.2 percent, marking the slowest growth since May 2013, with falling oil prices expected to ensure that the index falls below zero in February, with some economists predicting a year-on-year drop of one percent by September and, ultimately, the bank missing its target.

Far from being blase, however, the central bank boss said that a lot of efforts would be needed to ensure Japan manages to escape from its 15 bleak years of deflation.

"In order to escape from deflationary equilibrium, tremendous velocity is needed, just like when a spacecraft moves away from Earth's strong gravity," Kuroda said Friday.

"It requires greater power than that of a satellite that moves in a stable orbit," he added.

Despite critics saying the bank should remove its inflation target and focus more on economic growth than budget cuts, Kuroda' s analogy continued with him suggesting that Japan had to break completely free from its inflationary atmosphere and head for an orbit that was high enough not to be pulled back by inflation's gravitational pull.

"Reaching orbit at an altitude of one percent, for example, which is lower than that for satellites of other countries, is not enough. This is because satellites at a low altitude can be pulled back by gravity. An altitude of two percent is a global standard employed by each country," said Kuroda.

Analogies aside, leading economists maintain that the central bank here has bitten off more than it can chew and should take a more flexible, pragmatic approach to achieve its inflation target, that take into account unforeseeable global economic factors, such as the current oil glut and falling prices, rather than heedlessly trying to hit a previously set, hugely optimistic and rigid deadline. Endi