BOJ’s Kuroda says not debating exit from easy policy -Mainichi

TOKYO : Japan’s central bank is not debating an exit from ultra-loose monetary policy, Governor Haruhiko Kuroda has said, and will not do so during the rest of his term through April 2023, the Mainichi newspaper reported on Thursday.

“As long as our current price projection lives, there’s no chance we will debate (an exit policy),” the paper quoted Kuroda as saying in an interview.

“We’re not engaging in any debate of an exit. Doing so is inappropriate given Japan’s price developments.”

While rising fuel costs are pushing up wholesale prices, the chance of Japan’s consumer inflation accelerating sharply was “very small” as households have yet to become tolerant of price hikes, Kuroda said.

“The key would be wage growth,” he added, arguing that steady increases in wages would be crucial for consumer inflation to sustainably head toward the Bank of Japan’s 2per cent target.

“Japan’s economic recovery is slower than that of the United States and European countries, and (consumer) inflation is just 0.5per cent,” Kuroda was quoted as saying.

“As such, there’s no need to scale back monetary stimulus or shift toward policy tightening. Doing so is unlikely,” he added.

The benchmark 10-year Japanese government bond (JGB) yield hit a six-year high of 0.225per cent on Thursday, creeping near the implicit 0.25per cent cap the BOJ sets around its 0per cent target, on speculation the BOJ could follow in the footsteps of other central banks and start dialing back its massive monetary stimulus.

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