By Dan Burns

NEW YORK, (Reuters) –Bank of Japan Governor Haruhikokuroda stated Friday that central bank should continue its aggressive monetary easing despite a temporary rise in inflation caused by rising commodity prices.

Japan’s inflation will rise over the near term, however, this rise is primarily driven by cost-push inflation, Kuroda stated. However, it lacks sustainability.

Kuroda spoke at Columbia University to say that Japan has a negative output gap and still needs to meet the 2% goal in order to stabilize the economy. Kuroda was speaking about the BOJ’s 2 percent inflation target.

His statement was clear. “The Bank’s position in the present context is to persist with the current monetary easing centered upon yield curve management.”

Kuroda stated that Japan may see a slight increase in consumer inflation of around 2% in April, but the price rise has been less widespread than in the United States because there was weak growth in service prices.

Kuroda stated that central banks should tighten their monetary policies if the rise in commodity prices increases inflation expectations, triggering an unexpected spike in wage growth. This is also the case in the United States.

He said that it was unlikely for the rise in commodity prices in Japan to lead to an immediate rise in wages or prices.

Kuroda cited Japan’s negative production gap and said that there was no reason to be concerned about the economy overheating.

He stated that “Given recent developments in Japan’s economic situation, it is appropriate and necessary for the Bank to maintain monetary easing” and thus firmly support the economy.