The Bank of Japan's inflation rate has reportedly reached the official 2% target, and it is argued that policy should henceforth continue to be managed with the aim of stabilizing inflation at this level.
The editorial recognizes as a fact that the Bank of Japan's inflation rate has reached the 2% target that had been a longstanding policy challenge, noting that it took nearly 14 years to do so. It suggests that policy may shift from a phase of monetary easing to push up prices to one aimed at stabilizing them.
The Bank of Japan places emphasis on underlying inflation. Unlike the Consumer Price Index published by the Ministry of Internal Affairs and Communications, which is susceptible to fluctuations in fresh food prices and the effects of government measures to address inflation, the Bank uses its own estimates. In recent years, even when prices exceeded 2%, the Bank judged that underlying inflation had not reached that level.
For future policy management, the editorial argues that the aim should be price stability and a virtuous cycle of wage growth. At a press conference, Governor Kazuo Ueda (植田 和男) said that it was important to stabilize inflation at around 2%. In light of the current inflationary pressure, which is largely driven by external factors, he also referred to the possibility of additional rate hikes.
At the same time, higher prices are affecting people's lives, and the editorial points out that the government's policies, as well as those of the Bank of Japan, are being called into question. It expresses the view that policy should be managed at an appropriate time while taking both prices and economic conditions into account.