By Leika Kihara and Stanley White
TOKYO (Reuters) - Bank of Japan Governor Haruhiko Kuroda came out fighting on Friday, giving a spirited defense of the economy's performance after a run of weak data, and reiterated his readiness to expand stimulus if inflation faltered on the path to his 2 percent target rate.
"The BOJ is not aiming at achieving the price stability target of 2 percent temporarily. What it aims at is to achieve an economy in which inflation is about 2 percent on average year after year," he said, signaling that the central bank will not exit from its ultra-loose stimulus any time soon.
"I would like to emphasize that ... given the BOJ's clear and strong commitment to the 2 percent inflation target, it is a matter of course the BOJ will make adjustments if necessary to ensure the target is met," he said at a seminar.
He stressed that the BOJ will vigilantly monitor how a decline in real income affects consumer spending.
Kuroda said an increase in summer bonus payments to workers would help consumer spending recover from an increase in the sales tax in April, while labor and supply constraints meant companies are expected to keep raising wages.
"A positive cycle of output, income and expenditure is firmly in place, so we can say Japan's economy continues to recover moderately as a trend,"
There were signs, he said, that companies were ready to increase domestic investment after holding back spending on plant and equipment during a prolonged period of deflation.
Kuroda was also upbeat on the outlook for exports, which have remained weak to the disappointment of policymakers, saying that the current sluggishness was largely due to cyclical factors such as a lack of vigor in emerging Asian markets.
We expect exports to increase moderately reflecting improvements in overseas economies," he said.
Such positive economic developments will help accelerate consumer inflation toward the BOJ's price target, Kuroda said.
(Editing by Eric Meijer)
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