On the 8th, Bank of Japan Governor Kazuo Ueda expressed the view that the Bank of Japan’s price forecasts were incorrect. He gave his answer before the House of Representatives Finance Committee.
Governor Ueda explained that the current rise in prices is due to two factors: the spread of rising import prices to domestic prices, and the virtuous cycle of rising wages backed by rising prices. Although he had predicted that the inflation rate would fall due to the former’s “first force,” he said, “We have continued to make upward revisions,” adding, “We have to admit that there was a mistake in our forecast.” Stated. He added, “I would like to make efforts to ensure that forecasts are conducted appropriately.”
other remarks
It is desirable for the exchange rate to remain stable in line with the fundamentals, while also keeping in mind the suppression of YCC side effects and the suppression of exchange rate volatility.Considering that the second force is still a little weak, we do not think that the high prices that are maintaining the YCC will continue for a long time. Inflation caused by the first force, the level of which is expected to decline in the near future.The current situation is that operations are being continued to ensure that long-term interest rates do not rise significantly by more than 1%.The underlying price increase rate is a little away from 2%, and large-scale easing continues.
Bank of Japan Governor Kazuo Ueda
Photographer: Kiyoshi Ota/Bloomberg
At its monetary policy meeting on October 31st, the Bank of Japan decided to make the Yield Curve Control (YCC) policy more flexible by allowing long-term interest rates to exceed the upper limit of 1%. Outlook for economic and price trends (Outlook report), the year-on-year rate of increase in consumer prices has been revised upward from FY2013 to FY2025. It is expected to exceed 2% for three consecutive years starting in FY2022.
Governor Ueda pointed out in his speech on the 6th, “The certainty of achieving the 2% price stability target is gradually increasing.” “Currently, we have not yet reached a situation where we can predict with sufficient certainty that the price stability target will be achieved sustainably and stably,” indicating the Bank’s intention to persistently continue monetary easing under the YCC framework.
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2023-11-08 01:18:45
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