BOJ's Ueda keeps pledge to review stimulus when inflation goal met
By Leika Kihara and Tetsushi Kajimoto
TOKYO (Reuters) -Bank of Japan Governor Kazuo Ueda said on Friday the central bank will examine whether to maintain its various monetary easing measures, including negative interest rates, when sustained achievement of its inflation target comes into sight.
His remarks follow data on Thursday that showed Japan's economy unexpectedly slipped into a recession in the final quarter of last year on weak consumption and capital expenditure.
Despite the data, with inflation having exceeded the BOJ's 2% target for well over a year, many market players still expect the BOJ to end its negative interest rate policy in the coming months.
Ueda said he would closely watch annual labour-management wage talks that conclude in mid-March for big firms, as well as other indicators, to see whether the positive cycle of wages and prices are in place, paving the way for exiting negative rates.
«I want to confirm the virtuous cycle of wages and prices is strengthening,» he added.
«Based on our economic and price outlook as of now, Japan's monetary conditions will likely remain accommodative even after ending negative rates,» Ueda told parliament.
He also said Japan's real inflation-adjusted wages will likely turn positive as a tightening job market pushes up pay, and the effect of past surges in import costs dissipate.
«Our inflation forecast for fiscal 2025 is currently at 1.8%. We expect wages to rise slightly more than that,» Ueda said.
Recent reassurances from BOJ officials that monetary policy will remain ultra-loose even after ending negative rates have helped accelerate renewed declines in the yen.
In a fresh warning against excessive yen declines, Finance Minister Shunichi Suzuki said that while a
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