Bank of Japan Governor Haruhiko Kuroda has suggested that Japan’s highest inflation rate since 1981 has not swayed his resolve to continue monetary easing to achieve sustained inflation. .
“We hope that wages will start to rise so that the 2% inflation target can be achieved in a stable and sustained manner,” he told a panel discussion in Davos on Thursday. . “We have to wait a little longer,” he said.
The national consumer price index (core CPI excluding fresh food) for December 2018, announced on the same day, rose 4.0% from the same month last year, reaching the highest level in 41 years. The Davos panel was Kuroda’s first opportunity to speak after the release of the data.
The BOJ has maintained the status quo this week, dismissing strong market expectations of a policy revision. The governor’s remarks on this day seem to reinforce his message after the policy decision. Market pressure is likely to continue, however, as investors expect Kuroda to change course after his term expires on April 8.
Kuroda said Japan’s current inflation is largely due to rising import prices. Inflation is expected to start declining next month, he said.
On this day, the yen fell by more than 1% against the dollar at one point, reaching the 130 yen level. The liquidation of positions in anticipation of the Bank of Japan’s policy change in the near future continues. The yen has fallen about 2% this week.
Goldman Sachs Chief Economist Naohiko Baba said in a report that the BOJ will soon have to strike a better balance between its desire to maintain monetary easing and the sustainability of its yield curve control (YCC) policy. pointed out that it would be gone.
The yen hit a 30-year low against the dollar in October last year, but has since rebounded sharply on speculation that the Bank of Japan would withdraw from the YCC.
Original title:Kuroda Signals No Shift After Inflation Hits 41-Year High (1)、Kuroda Signals No Policy Shift After Inflation Hits 41-Year High(excerpt)
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