BOJ to Stick to Tackling Deflation after Achieving 2 Pct Inflation

Economy

Tokyo, June 7 (Jiji Press)--The Bank of Japan is poised to continue its ultraeasy monetary policy to fully overcome deflation, even after inflation in the country reached the BOJ’s target of 2 pct.

The central bank faces the task of communicating closely with markets over its monetary policy, amid growing speculation mainly among foreign investors that it may reverse course.

Inflation has been accelerating around the world due to a global recovery from the COVID-19 pandemic as well as soaring energy prices following Russia’s invasion of Ukraine.

In Japan, price increases in foods and other products sent consumer prices rising 2.1 pct in April from a year before, the fastest climb in seven years and the first time that the BOJ’s 2 pct inflation target was reached under Governor Haruhiko Kuroda, who took the helm in March 2013.

Nevertheless, Kuroda said in a speech Monday that “services prices have remained extremely rigid,” and that a clear increase in wages and a climb in services prices hold “the key to achieving the price stability target of 2 percent in Japan in a sustainable and stable manner.”

[Copyright The Jiji Press, Ltd.]

Jiji Press Bank of Japan