Mubasher: Japan’s monetary policy needs to remain “accommodative” so that the economy could see its targeted 2% inflation, Bank of Japan (BOJ) governor Haruhiko Kuroda has said.

"In order to reach 2 percent inflation target, I think the Bank of Japan must continue very strong accommodative monetary policy for some time," the BOJ’s top official told CNBC, noting that the Japanese economy was doing “quite well” as prices rise.

However, he said that consumer price inflation, excluding fresh food, remains at around 1%.

"And if you exclude energy items, then inflation rate is only about 0.5%," he added.

Last month, the BOJ said it was planning to keep short-term policy rate unchanged at -0.1% and the 10-year yield target around zero percent.

The BOJ will hold a two-day meeting, on Thursday and Friday, when it will issue new economic forecasts.

Sources told Reuters that the BOJ was expected to maintain its inflation forecast of a 2% target in the next fiscal year.

"There is still a long way to go to achieve the 2% inflation target," Kuroda highlighted but said he was confident that the Japanese economy would succeed in achieving its target in 2019, even though "risks are skewed to the downside".

Kuroda commenced his second term as BOJ governor earlier this month.

By 12:58 pm GMT, the USD/JPY pair added 0.52% to 108.2200.