BOJ’s Ueda: No set time frame for hitting 2% price target

By Leika Kihara

TOKYO (Reuters) -Bank of Japan Governor Kazuo Ueda said on Friday the central bank did not have a set time frame for achieving its 2% inflation target but that it would strive to hit it at the earliest date possible.

Speaking in parliament, Ueda said the country’s trend inflation was likely to heighten ahead, but that achieving the bank’s 2% target would take time.

He also said setting an explicit time frame for hitting the inflation goal was undesirable as doing so could have an unexpected market impact.

“The time it takes for the impact of monetary policy to appear on the economy could move around a lot depending on circumstances. We therefore do not have anytime time frame in mind” in achieving the inflation target, he said.

“Having said that, our baseline view is that it won’t take so long as over 10 years. We’ll still seek to hit the target at the earliest date possible,” Ueda said.

With inflation exceeding its 2% target for a year, market speculation is rife that Ueda will gradually phase out his predecessor’s massive stimulus that has drawn public criticism for distorting markets and crushing bank margin.

Ueda’s predecessor, Haruhiko Kuroda, deployed in 2013 a huge asset-buying programme with a pledge to achieve the BOJ’s 2% inflation target in roughly two years.

The BOJ’s target remained elusive until last year, when supply constraints and a spike in commodity costs caused by the COVID-19 pandemic and the war in Ukraine drove up Japan’s core consumer inflation near 4%.

Source link