BOJ to continue monetary easing to achieve inflation target
Reuters
Published Apr 12, 2023 04:41AM ET
Updated Apr 12, 2023 05:30AM ET
By Tetsushi Kajimoto
TOKYO (Reuters) - The Bank of Japan will continue monetary easing to achieve its 2% inflation target accompanied by wage hikes in a sustainable and stable manner, new deputy governor Shinichi Uchida said on Wednesday.
The comment followed Ueda's view earlier that it was appropriate to maintain the central bank's ultra-loose monetary policy for now as inflation has yet to sustainably meet its 2% target.
Ueda's repeated pledge to stand pat on policy may dim any expectations for reversing the BOJ's easy money stance anytime soon, particularly when global markets remain jittery about the risk of contagion from U.S. and European banking sector troubles.
Uchida said Japanese financial institutions are equipped with sufficient capital and fund-raising bases, making any impact from Western banking problems since March "limited."
Uchida was reading a speech at an annual gathering of trust associations on behalf of Governor Kazuo Ueda, who is traveling to Washington to attend the International Monetary Fund (IMF) and World Bank group's spring meetings.
"The pace of price hikes is expected to slow towards the middle of this fiscal year due to government steps to curb energy prices and as the effects of companies passing on costs wane," Uchida said.
"The BOJ will continue with monetary easing so as to achieve the price stability target in a sustainable and stable manner, while supporting the economy together with wage hikes."
More Japanese households are expecting prices to rise a year from now, a BOJ quarterly survey showed on Wednesday, raising pressure on the central bank to adjust or ditch its yield curve control (YCC) policy.
The survey, closely scrutinised by the central bank to determine the outlook for inflation, showed that the ratio of Japanese households expecting prices to rise a year from now stood at 85.7% in March, up from 85.0% in December.
On Monday, Ueda also said the BOJ must avoid being too late in normalising policy, a sign that he would be open to tweaking the controversial policy that caps the 10-year bond yield around zero.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.