TOKYO (Reuters) – Bank of Japan Governor Haruhiko Kuroda told the House of Representatives Finance and Financial Affairs Committee on Thursday that he would not resign. Answer to Takeshi Kai (Ritsumin).
Kai asked the governor if there was any change in his unwillingness to resign, given the fact that the BOJ has not stably achieved its 2% inflation target due to large-scale monetary easing.
After the introduction of QQE in 2013, Governor Kuroda created a situation in which deflation did not occur, wages were raised again, and employment expanded, but he acknowledged the fact that the inflation rate of 2% was not achieved.
Shinkai asked why the BOJ’s price outlook for fiscal 2022 was revised upwards significantly over the three-month period from July to October. We asked for the disclosure of the underlying data. Governor Kuroda explained that the BOJ’s outlook for prices is based on available data each time, but that “upward and downward fluctuations are possible depending on changes in underlying factors.”
According to the Bank of Japan’s price outlook, the consumer price index growth rate will fall from 2.9% in fiscal 2022 to the mid-1% range from fiscal 2023 onwards. Regarding the reason, Governor Kuroda explained that the cost-push factors “will gradually decay,” and pointed out that “the International Monetary Fund (IMF) and private-sector forecasts are on the same level.”
Kai argues that Governor Kuroda maintains a low-interest-rate policy to protect himself. Governor Kuroda said that in the current economic climate, it is necessary to continue the current YCC (long-term interest rate control), in which the short-term interest rate is minus 0.1% and the long-term interest rate is around 0% (with an upper limit of 0.25%). At the same time, if the 2% price target can be stably achieved, he said, “Flexible YCC is one of the options.”
* We will correct the category and resend.
