Bank of Japan (BOJ) Deputy Governor Masazumi Wakatabe on Thursday warned against watering down the bank's 2% inflation target, saying that doing so would undermine the effects of its ultra-loose monetary policy.
With inflation exceeding its 2% target, markets are rife with speculation the BOJ will start raising interest rates when dovish incumbent Governor Haruhiko Kuroda's term ends in April.market distortionsWakatabe, whose term as deputy governor will end in March, said an increasing number of companies were raising prices and becoming more keen to lift wages.
"Since current changes in prices were driven largely by rising import prices, it's necessary to carefully examine whether these changes will be maintained even after cost-push pressures have diminished," he said. "The BOJ will continue to conduct monetary policy with the aim of achieving its 2% inflation target, accompanied by wage increases," Wakatabe said.were 4.0% higher than a year earlier, rising at twice the rate of the BOJ's inflation target and keeping alive market expectations that the central bank would soon phase out stimulus.
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