Japan’s central bank may not exit its negative interest rates as many had hoped to see as early as January as an official signalled that it may take until well into next year to determine the move.
Seiji Adachi, a Bank of Japan’s board member, said on Wednesday that it was premature to discuss an end to negative policy rates as the central bank would want to see whether wages will rise enough before stepping out of the negative territory, which could take a few months into next year.
According to Adachi, the Bank of Japan needs a clear sign that prices and wages would rise in tandem while keeping inflation at a sustainable target rate of 2% before exiting the negative policy rates.
He added that sufficient data of wage negotiations between corporates and unions would not be available until after April 2024, which would mark the beginning of the new fiscal year for Japan.
Japanese yen was slightly weaker today against the greenback, currently moving around 147.50 yen per dollar.
