BOJ must ‘patiently’ maintain ultra-loose policy, says board member

BANK of Japan (BOJ) board member Hajime Takata said on Thursday (Mar 2) that the central bank must “patiently” maintain its ultra-loose monetary policy, as Japan has yet to see inflation sustainably hit its 2 per cent target backed by wage hikes.

While Japan’s economy is headed for a moderate recovery, it faces risks – such as slowing global demand – that could discourage companies from raising wages, Takata said.

“Now is the time when the BOJ must scrutinise whether the economy and prices can achieve a sustained, positive cycle,” he added. “While we need to be mindful of the impact of our massive stimulus programme on market function, we’re at a stage where we need to patiently maintain monetary easing.”

Takata also said that the BOJ would monitor market developments, to ensure bond-yield moves are stable. He added that the central bank would take into account the impact on market function in guiding monetary policy. With inflation in Japan well exceeding the 2 per cent target, markets are rife with speculation the BOJ will phase out its massive stimulus after incumbent governor Haruhiko Kuroda’s term ends in April. REUTERS