BoJ BOJ Governor Kazuo Ueda addressed parliament today, emphasizing, “In light of current economic, price and financial developments, it’s appropriate to maintain monetary easing, now conducted through yield curve control.”
Ueda reiterated the importance of keeping Japan’s monetary policy loose to achieve the 2% inflation target in a sustainable and stable manner, along with wage hikes. He added that if wage growth and inflation accelerate faster than expected and require tightening monetary policy, BoJ is prepared to respond by raising interest rates.
Despite this, Ueda warned of the risk of inflation falling further below expectations, calling it “very worrying.” He noted that “the risk of inflation undershooting forecasts is bigger than the risk of overshooting,” emphasizing the need to maintain the BoJ ‘s massive stimulus for the time being.
