BoJ board member Asahi Noguchi emphasized the need for continuing ultra-loose monetary policy in Japan.
Noguchi acknowledged on Saturday the impact of global inflation on Japan, stating, “It’s true the impact of elevated global inflation is reaching Japan’s economy with consumer inflation exceeding the BOJ’s 2% target since the spring of 2022.”
However, Noguchi differentiated the nature of Japan’s inflation from that of the West, pointing out that, “the rise is mostly due to cost-push factors amid higher import prices,” contrasting with the wage-driven price increases in US and Europe. This distinction is crucial in understanding BoJ’s monetary policy approach.
To effectively meet the BoJ’s inflation target, Noguchi emphasized “we must see price rises backed by sustained wage increases.”
Despite significant wage hikes in this year’s spring wage negotiations, Noguchi believes that Japan is only at the beginning of its journey to reach its inflation target, stating, “we’ve only just reached a stage where the possibility of achieving our target has come into sight.”
