BOJ chief says strategy backed by below-target inflation
Bank of Japan Gov. Kazuo Ueda explains that price growth is slower than the target of 2%, leading officials to continue their current monetary-policy strategy of easing.
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Posted 8/27/2023, 1:29:00 AM
japantimes.co.jp
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Thailand's economy grew at a slower pace in the second quarter due to weak exports and slower investment, prompting the government to lower its 2023 growth forecast, while the central bank may not raise rates again amidst faltering economic recovery and low inflation.
Malaysia's economic growth in the second quarter of 2023 was the slowest in nearly two years due to sliding exports and a global slowdown, prompting the central bank to warn of lower full-year growth and the possibility of the target being hard to reach.
Consumer inflation in Tokyo grew at a slower pace than expected in August, but the core figure, which excludes fresh food and energy costs, remained at its highest level in over 40 years, indicating that inflationary conditions in Japan remain high and putting pressure on the Bank of Japan to eventually tighten policy.
Bank of Japan Governor Kazuo Ueda stated that underlying inflation in Japan remains below the bank's 2% target, leading to the decision to maintain the current approach to monetary policy, despite core consumer inflation staying above the target for the 16th consecutive month.
The US economy grew at a slightly slower pace in the second quarter than previously estimated, indicating potential success for the Federal Reserve's efforts to cool demand and reduce price increases.
Former Bank of Japan board member Goushi Kataoka believes that the central bank can only shift away from its easy monetary policy once it has achieved its 2% inflation target sustainably, with wage negotiations in 2024 playing a key role in this process. Kataoka expects the Bank of Japan to gradually remove its yield curve control and negative interest rate policies before exiting its easy policy. He also emphasizes the importance of cooperation between the Japanese government and central bank in achieving the inflation target.
US inflation has slowed over the past year and wages are not a reliable indicator of future price increases, according to Federal Reserve officials.
Japan's annual wholesale inflation slowed for the eighth consecutive month in August, providing relief for households and retailers affected by previous increases in raw material imports.