BoJ Governor Kazuo Ueda, in a speech yesterday, acknowledged that while the probability of achieving the central bank’s price target is gradually increasing, it is still not high enough to justify a change in the current monetary policy.
Ueda highlighted, “The likelihood of Japan’s economy getting out of the low-inflation environment and achieving our price target is gradually rising, though the likelihood is still not sufficiently high at this point.”
The Governor pointed out the significant uncertainties surrounding economic and price conditions both domestically and internationally. He emphasized the importance of observing how firms’ wage- and price-setting behaviors evolve in response to these conditions.
Ueda also mentioned that “we will likely considering changing policy,” if there is significant strengthening of the virtuous cycle between wages and prices, leading to a sustainable and stable likelihood of achieving BoJ’s price target.
