BOJ Governor Kazuo Ueda (植田和男) said he expects underlying inflation to remain around the 2% target while recognizing upside risks, and referred to the possibility of reintroducing unconventional monetary policy.
BOJ Governor Kazuo Ueda (植田和男) spoke at an IMF-hosted seminar, saying he expects underlying inflation to remain around the 2% target. At the same time, he suggested that inflation could accelerate through early next year as prices of energy-related goods have begun to rise and affect inflation.
Ueda explained that Japan is in an equilibrium state in which wages are rising at a pace consistent with 2% inflation, but said the current 2% target has not become a social norm, making it important to anchor inflation around the target.
Regarding unconventional monetary policy measures, he said they had produced some positive effects when introduced, but could not serve as a complete substitute, and that their reintroduction could become necessary depending on the severity of an economic shock.
Ueda stressed that the BOJ will continue to closely monitor developments at other central banks and must respond while taking into account the effects of policy on asset prices, including exchange rates and interest rates.