Bank of Japan (BOJ) board member Asahi Noguchi said that the central bank must maintain its ultra-loose monetary policy to ensure wages, which is seen as a key part to drive inflation to the 2% target, continue to increase as a trend.
Noguchi expected core consumer inflation that is currently remaining above 2% will likely come down to the target level around September or October as the impact of rising raw material costs dissipates. However, the effort to ensure wage growth is becoming a sustained and strong trend.
Last week, the Bank of Japan kept the interest rate in a negative territory and also maintained the yield-curve control policy, which was in line with expectations from economists.
Japan’s central bank kept its short-term rate target at -0.1% to zero and Japanese government bonds 10-Y at -0.5% to 0.5% as the BOJ looks to support fragile economic growth amid uncertainties in the global economy.
Core inflation in Japan rose 3.4% in April, while its economic growth was revised up to 2.7%.
