TOKYO: Bank of Japan (BoJ) Governor Haruhiko Kuroda said on Thursday that recent declines in oil prices offer great benefits for Japan’s economy and will help to accelerate inflation in the long run.

The global slump in oil prices has created a major headache for the central bank by driving down Japan’s consumer inflation, which fell to 0.9 per cent in the year to October and is well below the 2pc target the BoJ has pledged to meet during the fiscal year beginning next April.

Some analysts believe the BoJ will be forced to cut its rosy price forecasts and ease monetary policy in January, when it issues fresh long-term economic and price projections.

Kuroda shrugged off that view, however, saying that while oil price falls weigh on overall prices in the short run, they will help to boost corporate profits and allow companies to increase wages.

“Let me be clear that October’s monetary easing wasn’t directly in response to crude oil price falls,” Kuroda told a meeting of Keidanren, Japan’s biggest business lobby.

Published in Dawn, December 26th, 2014