BoJ To Maintain Easy Policy Until Inflation Steadies At 2%, Says Iwata
The Bank of Japan will maintain its loose monetary policy until 2 percent inflation target is achieved in a stable manner, Deputy Governor Kikuo Iwata said Thursday.
"Even if the CPI reached 2 percent year-on-year, unless the Bank projects that inflation is likely to remain at around 2 percent in a stable manner, it will not simply end monetary easing," Iwata told business leaders in Miyazaki.
"What is most important at this juncture is that the Bank steadily make progress under the current policy framework," he added.
The negative impact from sales tax hike on households' income will be mitigated by the economic measures taken by the government. Moreover, the tax hikes seem to have already been factored in substantially among households, he noted.
"In sum, the consumption tax hike will temporarily generate a swing in the economy's growth rates and negatively affect disposable income," Iwata said.
But the virtuous cycle that has already been working in Japan's economy will continue and the economy is likely to continue growing at a pace above its potential, as a trend, he said.
News are provided by InstaForex.
