MNI BRIEF: BOJ Members Eye 2% Price Target, Wage Hikes

The Japanese economy can achieve the Bank of Japan's 2% price target if wage hikes continue in 2H one BOJ board member believes, while a separate member notes positive wage-setting behaviour has started to spread among firms, the September 21-22 meeting summary of opinions showed Monday.

One member noted 2H of this fiscal year will be an important period to determine whether the price stability target will be achieved, while a separate member noted meeting the 2% price target in a sustainable and stable manner seems to have come in sight. "The BOJ may be able to determine whether it will be achieved around January to March of next year,” the member noted.

“It is important from a risk management perspective to prepare and lay the groundwork for an exit from the current monetary policy in terms of, for example, (1) improving market functioning, such as through a securing of and recovery in liquidity, and (2) communicating with the market and society in view of this exit.”

Another member added a virtuous cycle that leads to inflation accompanied by wage increases "seems to have started to emerge.” A separate member noted higher inflation-rate market projections and the government's plan to hike minimum wages further could see wage growth next year "exceed that for this year.”