The Bank of Japan will keep monetary policy easy with the goal to keep inflation stable as the current price spike driven by imports is expected to peak soon, Governor Haruhiko Kuroda said Thursday.
(Bloomberg) — The Bank of Japan will keep monetary policy easy with the goal to keep inflation stable as the current price spike driven by imports is expected to peak soon, Governor Haruhiko Kuroda said Thursday.
The country’s inflation is likely to ease to below 2% in the middle of the 2023 fiscal year, the Bank of Japan chief said at a press conference following a G-7 gathering of finance chiefs in Bengaluru, India. Kuroda said he expected inflation to stay below 2% the following year unless there is a pickup in the pace of wage hikes.
“I explained that we will continue monetary easing to aim for sustainable, stable 2% inflation,” Kuroda said.
Kuroda’s position on Japan is at odds with the G-7 statement, which shows the group agreed more broadly on the need to stick to monetary policy tightening in order to cool inflation. The group discussed Russia’s war in Ukraine, in addition to the global economy.
Read: G-7 Finance Chiefs Condemn Russia’s War, Boost Aid to Ukraine
Kuroda’s comments come a day before Kazuo Ueda, the nominee to succeed Kuroda in April, is set to appear at his first parliament hearing during which lawmakers assess the candidate’s suitability for the job. Market participants may also get an initial picture of the policy direction under Ueda.
Hearings for nominees of two deputies are also scheduled on Friday.
Kuroda declined to comment on the new BOJ leadership, saying it’s presumptuous of him to say anything when the new chief and two deputies are not formally selected.
Market interest over the BOJ’s policy direction has intensified since Kuroda’s surprise move in December to double the trading band of the 10-year government bond yield. Ueda has said the BOJ’s current policy is appropriate and monetary easing needs to be continued at this point, indicating he’s unlikely to make an abrupt shift toward policy normalization.
–With assistance from Clarissa Batino.
(adds more comments from Kuroda)
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