Bank of Japan official says monetary tightening ‘premature’ | Business and Economy
Deputy Governor Masazumi Wakatabe says economy has yet to fully recover from pandemic.
It is too soon for the Bank of Japan (BOJ) to tighten monetary policy as the economy has not fully emerged from the pandemic’s hit, Deputy Governor Masazumi Wakatabe said, dousing speculation that creeping inflation could prompt it to tweak yield targets.
Wakatabe said in a speech on Thursday that consumer inflation may accelerate to around 1 percent in coming months and could speed up more than expected as more companies seek to pass on higher costs to households.
But the BOJ must maintain its massive stimulus programme as inflation expectations have yet to rise towards the bank’s 2 percent target, he said.
“It would be premature to tighten monetary policy before inflation hits the BOJ’s target, as doing so could cripple the economy’s recovery,” said Wakatabe, who is considered among the most dovish members of the BOJ’s board.
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