BOJ Governor Promises to Provide Economic Support via Stimulus

Bank of Japan Governor Kazuo Ueda reaffirmed on Thursday the central bank's commitment to supporting the economy by maintaining accommodative monetary conditions for the foreseeable future. During his testimony to parliament, Ueda emphasized that Japan's medium- and long-term inflation expectations are still in the process of accelerating towards the target of 2 per cent. He highlighted the importance of this goal in guiding the bank's monetary policy decisions.

Ueda also addressed concerns about the recent decision to end eight years of negative interest rates and other unconventional policies. He acknowledged that there were risks associated with the timing of the decision but defended it by stating that waiting for inflation to reach 2 per cent for an extended period could lead to potential challenges in managing inflation risks.

Furthermore, Ueda pointed out that while cost-push pressures on inflation from past rises in raw material prices were subsiding, there was a gradual increase in service-related prices. He highlighted positive developments in annual wage negotiations and the overall trend of rising wages and inflation, indicating a positive economic cycle.

Overall, Ueda's remarks underscored the BOJ's cautious approach to monetary policy adjustments, balancing the need to support economic recovery with the goal of achieving sustainable inflation levels.