Kazuo Ueda, Governor of the Bank of Japan, said that it is currently too early to conclude that the inflation process in this country is on a trajectory of steady approach to the financial regulator’s target of 2%.
According to the head of the central bank of the mentioned state, additional data on the prospects of the dynamic salary should be carefully scrutinized. Kazuo Ueda made the corresponding statement at a press conference after attending a meeting of G20 financial leaders in Sao Paulo in response to a question about achieving the price goal.
The governor of the Bank of Japan says that the financial regulator needs to confirm whether the positive cycle of wage inflation will begin and strengthen. He also said that the annual wage negotiations between companies and trade unions, scheduled for the end of March, will be crucial in forming an understanding about achieving the goal.
In Japan, the inflation rate has been fixed at above 2% for more than a year. Many market participants expect that the financial regulator will decide by April to abandon the implementation of the policy of negative interest rates.
Kazuo Ueda’s statement contrasts with the point of view of Hajime Takata, a member of the Board of the Bank of Japan, who this week expressed the opinion that the steady achievement of inflation at 2% is an economic reality of the near future.
Yen and Japanese bond yields rose after hawkish remarks by Hajime Takata, which intensified speculation about the abolition of negative interest rates in March. It is worth noting that the more common opinion is about a change in the monetary policy of the financial regulator in April.
As we have reported earlier, Probability of Interest Rate Cut by Bank of England Grows.
