The Bank of Japan's governor, Haruhiko Kuroda, reflected the rise in international commodity prices at a meeting after the monetary policy meeting on the 21st, even though the inflation outlook for 2022 exceeded the target of 2%. He pointed out that it was nothing more than a thing and did not reach the realization of sustainable and stable price targets, and said that it would continue monetary easing again. He emphasized that although there are side effects associated with curbing the 10-year interest rate to 0.25% under upward pressure on interest rates, there are no plans to raise the interest rate guidance target or the permissible upper limit.
Governor Kuroda once again denied policy management aimed at foreign exchange. However, he said, "It is unlikely that the depreciation of the yen will stop if the interest rate is raised a little." It will be. "
In the latest "Economic and Price Outlook" (outlook report) released on the 21st, the Bank of Japan raised the price outlook for 2022 by 2.3% from the previous year, up from the previous April's plus 1.9%. Fixed.
Governor Kuroda pointed out that the price outlook increase in FY2010 is largely due to the rise in import prices, which reflects the rise in international commodity prices. He emphasized that the 2% price stability target has not been achieved sustainably and stably, and that "monetary easing needs to be continued." "It's true that companies are making progress, but they haven't caught up with consumer prices of around 2%," he said, adding that wages need to rise further.
According to the outlook for the consumer price index (core CPI) excluding fresh food and energy, which shows more basic movements in prices, the rate of increase will gradually increase throughout the outlook period, while it will increase by 1.5% in FY2012, compared to the previous time. It didn't change.
Governor Kuroda pointed out that although price pass-through is progressing and medium- to long-term inflation expectations are rising moderately, "the core CPI is not in a situation of 2%."
Governor Kuroda emphasized his stance of adhering to the Yield Curve Control (YCC) framework. "We have no intention of raising interest rates under yield curve control, nor will we change the range of plus or minus 0.25%," he said.
In June, the Bank of Japan aggressively bought government bonds and held down the 10-year interest rate at 0.25% amid upward pressure on interest rates. As a result, liquidity declined for some stocks, causing side effects such as the temporary inactivity of bond futures and cash arbitrage.
Regarding the rapid depreciation of the yen in the foreign exchange market, he pointed out that "it is not desirable because it is negative for the economy, such as increasing uncertainty about the future and making it difficult for companies to formulate business plans." The Bank of Japan said, "We would like to work closely with the government and pay close attention to the trends in the foreign exchange market and its impact on the economy and prices."
Regarding the current exchange rate trend, he said that the dollar is rising alone, and the dollar is strengthening against the Korean won, which is raising interest rates as in the United States, and only the interest rate difference is rising. He said it wasn't the reason.
This decision meeting was the first meeting after the death of former Prime Minister Shinzo Abe. Governor Kuroda expressed his condolences for the death of former Prime Minister Abe, and regarding Abenomics, the government's policies and the Bank of Japan's strong monetary easing measures did not show a significant increase in wage bases or employment during the deflationary period. Explained that there was a change. He said that the large-scale monetary easing during this period has been exerting a solid boosting effect on the economy and prices and that he would like to continue to support the medium- to long-term growth of the Japanese economy from a financial perspective.
Regarding the handling of the special operation for corona, which will expire at the end of September, he said, "We decided to (handle) in September after a little more observation," considering that the infection is spreading rapidly.
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