BOJ Governor Kazuo Ueda (植田和男) said at the House of Councillors Budget Committee that the mechanism for moderate increases in wages and prices had returned, and assessed that inflation had risen to nearly 2%.
At the House of Councillors Budget Committee on the 19th, BOJ Governor Kazuo Ueda (植田和男) said that the mechanism through which wages and prices both rise moderately had returned in Japan, and assessed that the unconventional monetary easing launched in 2013 and government policies had provided a powerful stimulus to the economy.
Regarding the underlying rate of inflation, which the BOJ emphasizes in its monetary policy, Ueda said it had been rising gradually and had come quite close to 2%. He pointed out that it would become increasingly important to stabilize it at around the 2% level.
He reiterated the view that financial conditions are accommodative, explaining that long-term interest rates could rise if the market perceives that concerns over an upside surprise in prices or uncertainty about the outlook have increased.
He expressed the view that monetary policy aimed at the 2% price stability target would ultimately also contribute to stable interest-rate formation in the government bond market.