BoJ Deputy Governor Masazumi Wakatabe urged patience in maintaining ultra loose monetary policy. He repeated that “inflation has yet to reach our 2 percent target” even though price growth is on an “upward trend”. And by “patiently maintaining our current policy”, BoJ could “heighten inflation expectations”.
Waktatabe is not concerned with falling behind the curve as “even if for some reason inflation accelerates rapidly, we have the tools to deal with it.”
Though, he noted that “the merits and demerits of the BOJ’s monetary policy change over time.” And he added that BoJ needs to be “mindful of the danger, or risk, a prolonged low-interest rate environment would weigh on bank profits and that such impact could accumulate.”
Separately, the Japan Cabinet Office maintained the assessment that the economy is “recovering at a moderate pace”.
