By Leika Kihara
TOKYO (Reuters) – Bank of Japan (BOJ) board member Hajime Takata said on Thursday the central bank must “patiently” maintain its ultra-loose monetary policy, as Japan has yet to see inflation sustainably hit the bank’s 2% target backed by wage hikes.
While Japan’s economy is headed for a moderate recovery, it faced risks such as slowing global demand that could discourage companies from raising wages, Takata said.
“Now is the time where the BOJ must scrutinise whether the economy and prices can achieve a sustained, positive cycle,” Takata said in a speech.
“While we need to be mindful of the impact of our massive stimulus programe on market function, we’re at a stage where we need to patiently maintain monetary easing,” he said.
Takata also said the BOJ will scrutinise market developments to ensure bond yield moves are stable, and take into account the impact on market function in guiding monetary policy.
With inflation well exceeding its 2% target, markets are rife with speculation the BOJ will phase out its massive stimulus after incumbent governor Haruhiko Kuroda’s term ends in April.
(Reporting by Leika Kihara; Editing by Christian Schmollinger and Lincoln Feast.)
