On the 25th, Bank of Japan Governor Kazuo Ueda said of the Bank of Japan’s monetary policy, “We need to persistently continue monetary easing through the current framework of yield curve control (YCC).” He gave a lecture at a conference jointly sponsored by four Osaka economic organizations.
The Governor stated that some changes in corporate wage and price setting behavior are beginning to be seen, but pointed out that there is “extreme uncertainty as to whether these changes will spread in the future.” He expressed the recognition that “we have not yet reached a situation where we can foresee the sustainable and stable realization of the 2% price stability target accompanied by wage increases.”
other remarks
The Japanese economy is at a crucial point in whether a virtuous cycle of wages and prices will be realized, and it is an important phase to carefully nurture the seeds of change.The current framework for keeping long-term interest rates at a low level can have strong side effects depending on the situation, but it is important to balance the effects and side effects. , Pursuing the effects of easing under the current framework Flexibility of YCC’s operation, which had the effect of increasing the sustainability of monetary easing Expectations that economic improvement will increase wage growth and lead to moderate price increases Uncertainty surrounding the main scenario The potential for change in wage setting behavior is extremely large, and we are not confident that it will be realized at this point, so we need to assess the sustainability of changes in wage setting behavior at this point.
Bank of Japan Governor Kazuo Ueda
Photographer: Kiyoshi Ota/Bloomberg
At its monetary policy meeting on the 22nd, the Bank of Japan unanimously decided to maintain the status quo of large-scale easing. Following Governor Ueda’s interview with the Yomiuri Shimbun, the market was moving forward with its forecast for the end of negative interest rates, and there was also speculation that policy and future guidelines would be revised. At the press conference after the meeting, the governor expressed his understanding that there has not been much change in the feeling of being close to lifting negative interest rates.
On the other hand, regarding the year-on-year growth rate of consumer prices, he said, “There is a feeling that the rate of decline is a little slow.” Outlook for the economy and prices announced in October (Outlook report), he announced his intention to closely examine economic and price trends. Despite statements of restraint from Japan’s monetary authorities, there is no halt to the depreciation of the yen due to the difference in interest rates between Japan and the United States, and there remains no change in the environment in which expectations for policy revisions by the Bank of Japan are likely to increase.
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2023-09-25 06:00:20
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