Bank of Japan Governor Kazuo Ueda (植田和男) emphasized the “establishment” of the 2% price stability target and indicated a policy of adjusting monetary policy as appropriate without cooling the economy, while treating the achievement of 2% as a milestone. The extent to which the target becomes established and the management of monetary policy will be tested going forward.
The achievement of the 2% price stability target is positioned as a symbolic turning point at which the Bank of Japan shifts away from its previous focus on overcoming deflation. At a press conference, Governor Kazuo Ueda (植田和男) described reaching 2% as a milestone, while saying that “it is necessary to establish it,” and indicated a willingness to address the risks of rising prices without excessively cooling the economy. He emphasized that the Bank would continue to adjust monetary policy as appropriate rather than take the target's establishment for granted.
This policy shift is understood to reflect an intention to link the policies that have pushed prices higher to the long-term objective of establishing price stability. The Bank of Japan explained that, while treating the 2% target as a major milestone, it would focus not only on achieving it but also on maintaining stable price conditions. Stability that does not waver in response to economic shocks is a prerequisite for establishing the target.