BOJ Steadily Moving toward 2％ Price Target: Policymaker

Jiji Press

17:05 JST, March 7, 2024

TOKYO (Jiji Press) — A Bank of Japan policymaker said Thursday that the central bank is “steadily” moving toward achieving its consumer inflation target of 2%.

If the likelihood of attaining the target increases, the BOJ will examine whether to lift its negative interest rate policy and whether to make modification regarding its yield curve control program and its purchases of exchange-traded funds, Junko Nakagawa, a member of the BOJ’s nine-member policy board, said in a speech in Matsue, Shimane Prefecture.

There has been speculation that the BOJ will decide to lift the negative rate policy at its next policymaking meeting on March 18-19.

Under the policy, the BOJ sets an interest rate of minus 0.1% on part of commercial financial institutions’ current account deposits at the central bank.

The possibility is growing that the level of wage hikes in this year’s ongoing “shunto” labor-management negotiations will be higher than in the past, Nakagawa said.

, pointing to the high likelihood of Japan realizing a virtuous cycle of higher wages and prices on the back of robust corporate earnings.

Pay hike trends in the 2024 shunto are believed to be a major factor for the BOJ to decide whether to modify its ultraeasy monetary policy.

Meanwhile, Nakagawa said that the BOJ will continue gathering information to ensure appropriate monetary policy management as there are always various uncertainties.