BoJ chief dismisses near-term chance of exit from easy policy - BusinessWorld Online

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Bank of Japan (BoJ) Governor Haruhiko Kuroda on Monday brushed aside the chance of a near-term exit from ultra-loose monetary policy but voiced hope that intensifying labour shortages will prod firms to raise wages.

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He also said Japan’s average consumer inflation will likely slow below the BoJ’s 2% target in the nextBut Mr. Kuroda said wage growth will likely increase gradually due to intensifying labour shortages and structural changes in Japan’s job market, which are leading to higher pay for temporary workers and a rise in the number of permanent workers.

The strength of wage growth is seen as key to how soon the BoJ could raise its yield curve control targets, which are set at -0.1% for short-term interest rates and around 0% for the 10-year bond yield. While more companies are starting to hike prices to pass on higher costs to households, the BoJ must examine whether such changes in corporate price-setting behavior will take hold as a new norm in Japan, Kuroda said.

 

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