Bank of Japan governor Haruhiko Kuroda said Sunday the central bank would continue its expansive monetary policy in an effort to boost inflation, the Wall Street Journal reports.
“The Bank of Japan will consistently pursue aggressive monetary easing with a view to achieving the price stability target at the earliest possible time,” Kuroda said at a meeting of the Group of 30 in Washington.
“Achieving the 2 percent target is still a long way off,” Kuroda said.
The BOJ has maintained ultraloose policy for some time. In September 2016, it imposed a target on long-term interest rates, aiming to hold the yield on 10-year bonds at zero percent.
Kuroda indicated he didn’t intend to deviate from that policy soon and said he expected inflation would pick up.
Firms were reluctant to cut wages during the downturn, which means they have been equally reluctant to raise them during the recovery, he said. Full-time workers, who value employment stability, also have been hesitant to ask for wage increases, he said.
Kuroda said firms recently have begun to implement labor-saving efficiency improvements, which will eventually lead to greater productivity and help raise the economy’s productive capacity. That will lead to rising labor costs and put pressure on firms to raise prices, he added.
“Once price increases become widespread, medium to long-term inflation expectations for firms and households are expected to rise gradually and actual inflation will increase toward 2 percent,” he said.
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