The Bank of Japan’s Governor, Kazuo Ueda, has stated that the central bank will continue to maintain its ultra-loose monetary policy, as there remains a significant gap to achieve the 2% inflation target sustainably. Ueda’s comments downplay the expectations of a policy change in the near future. He told parliament, “We expect inflation to quite clearly slow below 2% toward the middle of the current fiscal year.”
Ueda added that inflation is likely to rebound after that, but there is high uncertainty regarding the outlook. One positive sign is the expected substantial increase in pay during this year’s annual wage negotiations, which could assist in breaking free from Japan’s deflationary mindset.
Ueda emphasised the bank’s stance, stating, “We will patiently continue monetary easing as there’s still distance to the achievement of sustainable and stable 2% price hikes together with continued rises in wages.” He also confirmed that the Bank of Japan would continue its long-term government bond-buying operations for the time being.
These comments come amidst market speculation that Ueda will soon begin phasing out his predecessor’s stimulus to address the increasing side effects of prolonged easing, such as the distortions caused by massive bond-buying in market pricing, reports Channel News Asia.
In the recent news about the Japanese government, prime minister Fumio Kishida made an announcement about his son Shotaro Kishida, that his son is resigning due to his “inappropriate” behaviour. The prime minister explained that the reason for this dismissal is accountability. Even before the announcement, there was already a scandal, published by a weekly magazine, showing the controversial photos of Shotaro Kishida and other family members pretending to hold a news conference at the official residence.
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