BOJ Talks Up Chinese Economy

Japan Times: The Bank of Japan is China’s biggest cheerleader
Kuroda, however, is guilty of taking things to the opposite extreme. Speaking in New York, he challenged the negativity shrouding Asia’s biggest economy, saying he’s “reasonably sure” China will grow between 6 percent and 7 percent this year and next — a prediction that hardly anyone else has endorsed. Kuroda has effectively lashed his credibility, and his legacy, to China’s trajectory. It’s not hard to understand why he might have felt he had no choice.

Kuroda has to contend with three big problems. The first is demographics. Just as his predecessor Masaaki Shirakawa warned, Japan’s consumer prices are bound to fall as its population ages. The second is a dearth of confidence: Monetary policy has been rendered comatose by the public’s hesitance to borrow and banks’ hesitance to lend. The third is China’s slowdown — a variable far beyond Tokyo’s control, but no less critical for Japan’s fate.

Reuters: BOJ's Kuroda says China slowdown unlikely to hit Japan exports much
"Already exports to China have been affected, but I do not think that Japan exports in coming years will be (very) negatively affected," he told a seminar hosted by the Japan Society in New York.

That is "partly because China will maintain 6 to 7 percent growth and Japanese capital goods are... quite competitive."

Kuroda said China's monetary easing is an appropriate step to mitigate any impact on its economy, adding that some market players have become "too pessimistic" about the Chinese economy given its growth is "still quite robust".

..."We think that the 2-percent inflation target would be achieved with the current QQE," he said. "So at this stage we have no concrete proposal for further accommodation."

Analysts at Barclays Capital said Kuroda's remarks show the BOJ has not changed its upbeat economic and price assessments, and appears in no mood to act at least until April next year.

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