Bank of Japan (BOJ) Gov Kuroda: Japan is not in position for monetary tightening; Retiterates stance to continue with monetary easing persistently
- Will take strong stance on monetary easing
- Important for Japan's consumer inflation to achieve 2% on average, not temporarily
- Reiterates view that most inflation from energy prices - Weak Yen pushes up both import and export prices, so it is neutral on terms of trade
- Need to support demand with stimulus
- Recovery in consumption and Capex is weaker than in the US or EU zone economies
- BOJ must cushion blow from falling real income, driven by rising raw material costs, on households, firms by maintaining easy monetary policy
- Amount of BOJ bond buying has not increased much despite BOJ recent decision to offer unlimited buying of 10-year JGBS at 0.25%
- Japan households are becoming more accepting to price rises, which is an important change in terms of achieving BOJ price goal
- Households' forced savings, accumulated during covid pandemic, may have made them more accepting to price rises
- Central banks' basic understanding is to maintain monetary easing unless cost-push inflation leads to second-round effects such as heightening inflation expectation, wage growth