(Reuters) – The Bank of Japan maintained ultra-low interest rates on Friday and a pledge to keep supporting the economy until inflation sustainably hits its 2% target, suggesting it was in no rush to phase out its massive stimulus programme.

Following are excerpts from BOJ Governor Kazuo Ueda’s comments at his post-meeting news conference, which was conducted in Japanese, as translated by Reuters:

PRICE TARGET

“We have yet to foresee inflation stably and sustainably achieve our price target. That’s why we must patiently maintain ultra-loose monetary policy. Having said that, we will of course shift policy if achievement of our target is foreseen. For now, the outlook for the economy and prices is extremely high.”

ON NEXT YEAR’S WAGE OUTLOOK

“Big firms’ outcome will start streaming in around January-March, followed by other firms. We’ll need to look at factors that affect the wage negotiations. That’s something we will do at each policy meeting. We can’t set a pre-set timing on when we can make a judgment.”

ON BALANCE OF RISK ON INFLATION

“There’s downside and upside risks to inflation. We’ve been focusing on downside risks because of Japan’s long period of deflation and low inflation. There was also the fact we could not push interest rates below zero. There’s no change to our risk balance. If we do see the risk balance changing, we will disclose (markets) as appropriate.”

ON RECENT PRICE MOVES

“Since we published the July outlook report, inflation isn’t overshooting sharply. But it’s not slowing as much as we expected.”

“When we can foresee inflation stably and sustainably hitting 2%, we will consider ending YCC or revising negative interest rates.”

ON HIS COMMENT IN A RECENT INTERVIEW THAT HE COULDN’T RULE OUT THE CHANCE THE BOJ WILL GET ENOUGH DATA TO DETERMINE WHETHER CONDITIONS ARE IN PLACE TO SHIFT POLICY

“It wasn’t as if any time frame for achieving our price target had changed. I thought that by ruling out the possibility completely would bind the discussion of upcoming policy-setting meetings.”

ON RECENT YEN, LONG-TERM INTEREST RATE MOVES

“As for long-term interest rates, they have been moving in line with our guidance since July.”

“It’s desirable for currencies to move stably, reflecting fundamentals… Currency moves affect economic and price developments. We’re monitoring currency moves carefully from the standpoint that they affect inflation.”

ON PRICE HIKES

“We’re seeing heightening inflation expectations, or a change in corporate behaviour. In the past, it was hard for companies to hike prices. But as more and more companies began raising prices, those who were hesitant are starting to follow suit. We’re scrutinising developments at each policy meeting, but I think the peak (of price hikes) is nearing.”

“For Japan to stably and sustainably achieve 2% inflation, we need to see strong demand support inflation. We need to confirm that a positive wage-inflation cycle has kicked off. This is where we still need time. Trend inflation is still somewhat short of 2%.”

ON THE TIMING OF REMOVING THE BOJ’S OVERSHOOTING COMMITMENT

“Logically it’s possible because inflation has been exceeding our target for quite a long time. But (a removal) would have a certain announcement effect. This guidance is also considered as part of a package of measures, so we need to be careful (about tweaking it). Our priority should be to ensure Japan foresees inflation sustainably achieving 2%.”

(Reporting by Leika Kihara; Editing by Subhranshu Sahu)

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