Bank of Japan Governor: "No Choice but to Continue Easing Monetary Policy"

Haruhiko Kuroda, Governor of the Bank of Japan (BOJ)
Photo by Reuters Yonhap News

[Asia Economy Reporter Jeong Hyunjin] Haruhiko Kuroda, Governor of the Bank of Japan (BOJ), who attended the Jackson Hole meeting held in Wyoming, USA, said on the 27th (local time) that the accommodative monetary policy would continue.

According to Bloomberg News, Governor Kuroda said this during the Q&A session after the panel discussion at the Jackson Hole meeting that day. He stated, "Somewhat miraculously, the current inflation rate is 2.4%. However, most of it is due to unusual increases in international commodity prices, energy, and food. Accordingly, by the end of this year, the inflation rate will be around 2-3%, and next year, the rate of increase will slow down to 1.5%." He added, "Therefore, there is no choice but to continue the accommodative monetary policy until wage and price increases are stable and sustained."

Japan's consumer price inflation rate (excluding fresh food) recorded 4.1% in April, then 2.1% in May, 2.2% in June, and 2.4% in July, exceeding the BOJ's inflation target of 2% for four consecutive months. Nevertheless, the market expects that the accommodative monetary policy will be maintained until Governor Kuroda's term ends in April next year. This is in contrast to major central banks in the US, Europe, and other countries, which are pursuing monetary tightening policies to curb high inflation.

Meanwhile, this Jackson Hole meeting was held for the first time in over three years since 2019 due to the impact of COVID-19. Amid major central banks struggling with rising inflation, economists and central bank officials from around the world gathered in one place to exchange opinions on economic policies.