BOJ official says yet to see positive wage-inflation cycle – easy policy to remain

Seiji Adachi is a Member of the Policy Board of the Bank of Japan.

His comments are mixed but he is not expressing any rush to exit easy policy.

  • Japan yet to see positive wage-inflation cycle become embedded enough
  • Appropriate to
    patiently maintain easy policy
  • If needed BOJ will
    take additional easing steps
  • Steps BOJ took in
    October to make YCC flexible not aimed at laying the groundwork for
    policy normalisation
  • Japan’s inflation expectations heightening moderately
  • See risk to Japan’s
    inflation outlook skewed to upside
  • Companies starting to shed deflationary price-setting practices
  • Hard to predict now
    whether wage hikes will continue next fiscal year
  • Given high
    uncertainty over global economic outlook, there is risk japan’s
    inflation, wages face downward pressure
  • If positive
    wage-inflation cycle strengthens, that could further push up prices

This article was written by Eamonn Sheridan at Source