TOKYO (Reuters) - Bank of Japan Governor Haruhiko Kuroda said the central bank still has policy options left if it were to ease monetary policy further to fend off risks that may threaten the achievement of its price target.
Kuroda repeated his view that the world's third-largest economy is making steady progress toward meeting the BOJ's 2 percent price target, with core consumer inflation having reached 1.3 percent for four straight months in March.
"But we are ready to adjust policy, be it further monetary easing or something else, if changes in economic and financial developments derail the path toward meeting the price target," he said in an interview with the Nikkei business daily published on Saturday.
Kuroda said the BOJ will not ease incrementally in response to temporary fluctuations in the economy, suggesting that the bank will consider acting again only if it sees enough evidence that doing so is necessary to meet the price target.
He did not elaborate on what steps the BOJ could take if it were to expand stimulus, only saying that this would depend on the type of risks the bank is responding to at the time.
"We will take the most effective and efficient measure to deal with economic and financial developments at the time," he said, adding that there are "no limits" to the kind of options remaining for the central bank.
The BOJ deployed an intense burst of stimulus in April last year, pledging to pump money via aggressive asset purchases to accelerate inflation to 2 percent in roughly two years in a country that has been mired in deflation for 15 years.
It has kept policy steady since then. Some market players have said the BOJ's tool kit has been exhausted after last year's massive monetary stimulus, under which it already gobbles up 70 percent of newly issued government bonds each month.
(Reporting by Leika Kihara)