The Bank of Japan’s Governor Haruhiko Kuroda stressed again the bank’s determination to stick to its ultra-loose monetary policy, despite inflation in the world’s No3 economy continuing to exceed its 2% target.
Japan’s core consumer inflation hit a fresh 41-year high of 4.2% in January, data showed on Friday, putting the central bank under pressure again to phase out its stimulus programme.
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“The rise in consumer inflation is driven mostly by moves by companies to pass on rising raw material costs to households,” Kuroda told a news conference after attending the G20 finance leaders’ gathering in Bengaluru, India.
The BOJ expects core consumer inflation to slow below 2% in both fiscal 2023 and 2024, as the effect of past rises in raw material costs fades, he said.
“It’s true Japan’s situation is quite different from that of the United States and advanced European countries. The BOJ must maintain current ultra-loose policy to sustainably and stably achieve its 2% target,” Kuroda said.
- Reuters with additional editing by Sean O’Meara
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