Japan will stick to ultra-soft policy-Kuroda
2023.01.20 09:42
Japan will stick to ultra-soft policy-Kuroda
By Kristina Sobol
Budrigannews.com – Haruhiko Kuroda, governor of the Bank of Japan, stated on Friday that the bank will maintain its “extremely accommodative” monetary policy in order to achieve its 2% inflation target in a stable and sustainable manner.
“Our hope is that wages will begin to rise, which could help us meet our goal of 2% inflation in a stable and long-term way. But we have to wait,” he told a panel at the annual meeting of the World Economic Forum (WEF).
Kuroda dismissed criticism that the BOJ’s decision to widen the band surrounding its 10-year bond yield target did not eliminate market distortions and instead fueled speculation of additional alterations to its yield curve control (YCC) policy, calling it “perfectly right.”
In December, core consumer prices in Japan increased by 4.0% over the previous year, exceeding the target of 2% set by the central bank. This resulted in a fresh 41-year high and maintained market expectations that the central bank might eventually phase out its extremely low interest rates.
Consumer inflation will likely begin to slow in February and average less than 2% in the fiscal year that begins in April, according to Kuroda, who stated that higher import costs were largely to blame for the rise in inflation that occurred in December.
He stated, “Overall, the policy of the government, coupled with the BOJ’s extremely accommodative policy, have been successful in changing Japan’s economic structure and growth prospects.”
He stated, “But our target of 2% inflation has not been achieved in a sustainable, stable manner.” That is my only regret,” Kuroda stated, referring to his decade at the helm of the BOJ, which will come to an end when his term comes to an end in April.
