Bank of Japan’s Asahi Noguchi said that they must see wages rise at a faster pace than the rate of inflation to achieve the appropriate level of inflation in a stable manner.
Also, he said that Japan must see domestic maco-economic factors, such as steady rise in nominal wages, to push up prices to stably achieve BoJ’s 2% inflation target.
Key comments
BoJ must maintain monetary easing, keep interest rates at low levels now as achievement of 2% inflation target remains uncertain.
Desirable for fx rates to move stably reflecting fundamentals.
Excessively sharp fx fluctuations cause demerits, so must be vigilant to impact of fx moves and impact on japan’s economy and prices.
There is risk monetary tightening undertaken by central banks could hurt global growth.
Recent rise in japan’s consumer inflation due mostly to rising imported goods prices.
Japan’s trend inflation, which is more important in guiding monetary policy, remains low.
More companies are passing on rising costs to consumers, which could affect trend inflation.
Cannot say japan has stably, sustainably achieved boj’s 2% inflation target yet.
Japan’s consumer inflation likely to fall back below 2% once cost-push factors dissipate.
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- Source: https://www.fxstreet.com/news/bojs-noguchi-important-to-continue-with-easing-persistently-202212010147
